The stockholders' equity of Peak Corporation at January 1 follows:

The following transactions, among others, occurred during the year:

Jan. 12 Announced a 4-for-1 common stock split, reducing the par value of the common stock to \(\$ 3.75\) per share. The authorization was increased to 400,000 shares.

Mar. 31 Converted \(\$ 40,000\) face value of convertible bonds payable (the book value of the bonds was \(\$ 43,000\) ) to common stock. Each \(\$ 1,000\) bond converted to 125 shares of common stock.

June 1 Acquired equipment with a fair market value of \(\$ 90,000\) in exchange for 500 shares of preferred stock.

Sept. \(\quad 1\) Acquired 10,000 shares of common stock for cash at \(\$ 10\) per share.

Oct. 12 Sold 1,500 treasury shares at \(\$ 12\) per share.

Nov. 21 Issued 5,000 shares of common stock at \(\$ 11\) cash per share.

Dec. 28 Sold 1,200 treasury shares at \(\$ 9\) per share.

31 Closed net income of \(\$ 105,000\) to the Retained Earnings account.

Required

a. Set up T-accounts for the stockholders' equity accounts as of the beginning of the year and enter the January 1 balances.

b. Prepare journal entries for the given transactions and post them to the T-accounts (set up any additional T-accounts needed). Do not prepare the journal entry for the Dec. 31 transaction, but post the appropriate amount to the Retained Earnings T-account. Determine the ending balances for the stockholders' equity accounts.

c. Prepare the stockholders' equity section of the balance sheet at December 31.

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7 Percent preferred stock, $100 par value, 20,000 shares authorized; 5,000 shares issued and outstanding... Common stock, $15 par value, 100,000 shares authorized; 40,000 shares issued and outstanding...... Paid-in capital in excess of par value-Preferred stock. Paid-in capital in excess of par value-Common stock. Retained earnings. Total Stockholders' Equity. $ 500,000 600,000 24,000 360,000 325,000 $1,809,000