Kohler Corporation reports the following components of stockholders’ equity at December 31 of the prior year.During the current year, the following transactions affected its stockholders’ equity accounts.
Jan. 2 Purchased 4,000 shares of its own stock at $20 cash per share.
Jan. 5 Directors declared a $2 per share cash dividend payable on February 28 to the February 5 stockholders of record.
Feb. 28 Paid the dividend declared on January 5.
July 6 Sold 2,000 of its treasury shares at $24 cash per share.
Aug. 22 Sold 2,000 of its treasury shares at $16 cash per share.
Sep. 5 Directors declared a $2 per share cash dividend payable on October 28 to the September 25 stockholders of record.
Oct. 28 Paid the dividend declared on September 5.
Dec. 31 Closed the $388,000 credit balance (from net income) in the Income Summary account to Retained Earnings.

Required

1. Prepare journal entries to record each of these transactions.

2. Prepare a statement of retained earnings for the current year ended December 31.

3. Prepare the stockholders’ equity section of the balance sheet as of December 31 of the current year.

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Common stock-$10 par value, 100,000 shares authorized, 40,000 shares issued and outstanding.... $400,000 60,000 Paid-in capital in excess of par value, common stock Retained earnings....... Total stockholders' equity 270,000 $730,000