The stockholders' equity accounts of Marya Corporation on January 1, 2014, were as follows.

Preferred Stock (9%, $100 par, cumulative, 5,000 shares authorized) ...$300,000

Common Stock ($3 stated value, 300,000 shares authorized) ...... 660,000

Paid-in Capital in Excess of Par—Preferred Stock .......... 20,000

Paid-in Capital in Excess of Stated Value—Common Stock ...... 396,000

Retained Earnings ........................ 488,000

Treasury Stock (5,000 common shares) .............. 30,000

During 2014, the corporation had the following transactions and events pertaining to its stockholders’ equity.

Feb. 1 Issued 3,000 shares of common stock for $19,500.

Mar. 20 Purchased 1,500 additional shares of common treasury stock at $6 per share.

June 14 Sold 4,000 shares of treasury stock—common for $26,000.

Sept. 3 Issued 2,000 shares of common stock for a patent valued at $14,000.

Dec. 31 Determined that net income for the year was $350,000.

No dividends were declared during the year.

Instructions

(a) Journalize the transactions and the closing entry for net income.

(b) Enter the beginning balances in the accounts and post the journal entries to the stockholders’ equity accounts. (Use J1 as the posting reference.)

(c) Prepare a stockholders’ equity section at December 31, 2014, including the disclosure of the preferred dividends in arrears.