The charter for Zealax, Inc., authorizes the company to issue 250,000 shares of $3, no-par preferred stock and 950,000 shares of common stock with $8 par value. During its start-up phase, Zealax, Inc., completed the following transactions:

2016

Oct 6 Issued $25 shares of common stock to the promoters who organized the corporation, receiving cash of $17,850.

12 Issued 500 shares of preferred stock for cash of $21,000.

14 Issued 1.000 shares of common stock in exchange for land with a market value of $17.000.

Requirements

1. Record the transactions in the journal.

2. Prepare the stockholders' equity section of the Zealax balance sheet at December 31, 2016. Assume the company earned net income of $42,000 during this period?