The articles of incorporation for Mid-way Consulting Inc. authorize the company to issue 500,000 $5 preferred shares and 1,000,000 common shares. During its first year of operations, Mid-way Consulting Inc. completed the following selected transactions:
2014 Jan. 4 Issued 5,000 common shares to the consultants who formed the corporation, receiving cash of $140,000.
13 Issued 500 preferred shares for cash of $55,000.
14 Issued 4,000 common shares in exchange for land valued at $120,000.
Dec. 31 Earned a profit for the fiscal year and closed the $150,000 net income into Retained Earnings.
Required
1. Record the transactions in the general journal.
2. Prepare the shareholders' equity section of the Mid-way Consulting Inc. balance sheet at December 31, 2014.