Young the Giant Corp. was formed in 2018, with 10,000 shares of $100 par value, 5% cumulative, preferred stock and 500,000 shares of $1 par value common stock authorized. The company engaged in the following transactions.

2018:

On January 2, 2018, the company issued 50,000 shares of common stock at a price of $30 per share.

January 3, 2018, the company issued 5,000 shares of preferred stock for par value.

The net loss for 2018 was $800,000. The company closed it out to retained earnings from income summary on December 31. (Prepare that entry.) No dividends were declared.

2019:

The company repurchased 2,000 shares of common stock on November 25, 2019 at a cost of $35 per share. It is recorded using the cost method.

The company generated net income during 2019 of $2,000,000. The company closed it out to retained earnings from income summary on December 31. (Prepare that entry.)

On December 31, 2019, the company announced a total dividend of $150,000. The company records all dividends in one Dividends and one Dividends Payable account, but shows separate preferred and common dividends amounts in journal entry explanations. Required: Show all calculations.

a) Prepare journal entries in proper form for the 2018 and 2019 transactions above. Any calculations must be shown below the entries as part of the explanations.

b) Prepare the stockholders equity section of the balance sheet after the two years have passed, so as of December 31, 2019. This excerpt from the balance sheet must:

Have a proper heading;

Show all amounts in currency format with zero decimal places;

Use proper single- and double-underlining;

Show all categories of shares as part of each category of stock;

Show par values and the preferred dividend rate, and

Follow all general formalities.