Lockridge-Priest, Inc., was organized in 2008. At December 31, 2008, the Lockridge-Priest balance sheet reported the following stockholders' equity:

Requirements 

1. During 2009 , the company completed the following selected transactions. Journalize each transaction. Explanations are not required.

a. Issued for cash 1,000 shares of preferred stock at par value.

b. Issued for cash 2,000 shares of common stock at a price of \(\$ 3\) per share. 

c. Net income for the year was \(\$ 75,000\), and the company declared no dividends. Make the closing entry for net income.

2. Prepare the stockholders' equity section of the Lockridge-Priest balance sheet at December 31, 2009.

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Paid-in capital: Preferred stock, 6%, $50 par, 100,000 shares authorized, none issued...... Common stock, $1 par, 500,000 shares authorized, 60,000 shares issued. 60,000 Paid-in capital in excess of par-common 40,000 Total paid-in capital....... 100,000 Retained earnings...... 25,000 Total stockholders' equity. $125,000