Torrie Corporation is authorized to issue an unlimited number of no par value common shares and 1,000,000 shares of no par value preferred shares. During 2010, its first year of operation, the company had profit of $200,000, and other comprehensive income of $24,000. The following share transactions occurred.

Jan. 1 Paid the province $2,000 for incorporation fees.

Jan. 15 Issued 500,000 preferred shares at $7 per share. Cumulative dividends not yet declared were $1 per share.

Jan. 30 Lawyers for the company accepted 500 common shares as payment for legal services provided in helping the company incorporate. The legal services are estimated to have a value of $5,000. The shares were actively trading at $10.50 per share.

July 2 Issued 100,000 common shares for land. The land had an asking price of $900,000. The shares are currently selling on a provincial exchange at $8 per share.

Instructions

(a) Journalize the transactions for Torrie Corporation.

(b) Prepare the shareholders equity section of the balance sheet. Torrie has a December 31 year-end.