Prince Observation incorporated on May 1, 2020, and was authorized to issue 500,000 common shares and 100,000, 5% non-participating, convertible preferred shares. During the remainder of 2020, the company entered into the following transactions:

1. Issued 30,000 common shares in exchanged for $600,000.

2. Issued 5,000 preferred shares in exchange for $75,000.

3. Repurchased 3,000 common shares for $24.00 per share in the open market.

The company entered into no other transactions that affected shareholders’ equity during 2020.

Required

a. Provide the journal entries for each of the transactions.

b. Prince Observation generated $750,000 in net income in 2020 and did not declare any dividends during 2020. Prepare the shareholders’ equity section of the statement of financial position as of December 31, 2020.