Exercise $13-7$

Issuing shares and preparing the

shareholders' equity section of

the balance sheet

Total shareholders' equity

$$465,000$

The articles of incorporation for Mid$-$way Consulting Inc. authorize the company to issue

$500,000$$$5$ preferred shares and $1,000,000$ common shares. During its first year of opera$-$

tions, Mid$-$way Consulting Inc. completed the following selected transactions:

$2014$

Jan. $4$ Issued $5,000$ common shares to the consultants who formed the corporation,

receiving cash of $$140,000.$

$13$ Issued $500$ preferred shares for cash of $$55,000.$

$14$ Issued $4,000$ common shares in exchange for land valued at $$120,000.$

Dec. $31$ Earned a profit for the fiscal year and closed the $$150,000$ net income into

Retained Earnings.

Required

Record the transactions in the general journal.

Prepare the shareholders' equity section of the Mid$-$way Consulting Inc. balance sheet

at December $31,2014.$