The charter for Zerron, Inc. authorizes the company to issue 500,000 preferred shares and 700,000 common shares. During its start-up phase, Zerron, Inc. completed the following transactions:
Jul 6 Issued 575 common shares to the promoters who organized the corporation, receiving cash of $17,250.
12 Issued 650 preferred shares for cash of $23,000.
14 Issued 1,200 common shares in exchange for land valued at $19,000.
1. Record the transactions in the journal.
2. Prepare the shareholders’ equity section of Zerron’s balance sheet at December 31, 2014. Assume that the company earned net income of $37,000 during this period.