On January 5, 2015, Phelps Corporation received a charter granting the right to issue 5,000 shares of \($100\) par value, 8% cumulative and non-participating preference shares, and 50,000 shares of \($10\) par value ordinary shares. It then completed these transactions.

Jan. 11 Issued 20,000 ordinary shares at \($16\) per share.

Feb. 1 Issued to Sanchez Corp. 4,000 preference shares for the following assets: machinery with a fair value of \($50\),000; a factory building with a fair value of \($160\),000; and land with an appraised value of \($270\),000.

July 29 Purchased 1,800 ordinary shares at \($17\) per share. (Use cost method.)

Aug. 10 Sold the 1,800 treasury shares at \($14\) per share.

Dec. 31 Declared a \($0.25\) per share cash dividend on the ordinary shares and declared the preference dividend.

Dec. 31 Closed the Income Summary account. There was \($175\),700 net income.

Instructions

(a) Record the journal entries for the transactions listed above.

(b) Prepare the equity section of Phelps Corporation’s statement of financial position as of December 31, 2015.