Gray Company lists the following shareholders’ equity items on its December 31, 2015, balance sheet:

Gray Company

Balance Sheet (Shareholders' Equity)

December 31, 2015

1	Contributed Capital:
2	Preferred stock, 8%, $100 par	$120,000.00
3	Common stock, $10 par	180,000.00
4	Additional paid-in capital on preferred stock	21,600.00
5	Additional paid-in capital on common stock	90,000.00
6	Total contributed capital	$411,600.00
7	Retained earnings	230,000.00
8	Accumulated other comprehensive income:
9	Unrealized increase in value of available-for-sale securities	6,000.00
10	Total contributed capital, retained earnings, and accumulated other comprehensive income	$647,600.00
11	Less: Treasury stock (2,000 shares of common at $21 per share, acquired on March 3, 2015)	(42,000.00)
12	Total Shareholders’ Equity	$605,600.00

The following stock transactions occurred during 2016:

Jan.	4	Issued 3,000 shares of common stock at $25 per share.
	30	Paid the annual 2015 per share dividend on preferred stock and the $2 per share dividend on common stock. These dividends had been declared on December 31, 2015.
Mar.	2	Issued 400 shares of preferred stock at $125 per share.
May	7	Reissued 600 shares of treasury stock at $24 per share.
Jun.	15	Split the common stock 2-for-1, reducing the par value to $5 per share.
Jul.	2	Declared a 5% stock dividend on the outstanding common stock, to be issued on August 3. The stock is selling for $14 per share.
Aug.	3	Issued the stock dividend.
Oct.	1	Declared a property dividend payable to common shareholders on November 1. The dividend consists of 200 Lamb Company bonds that are classified as an available-for-sale investment. The bonds had been acquired at a cost of $24,000 and have a carrying value of $30,000. The bonds are currently selling for $32,000.
Nov.	1	Issued the property dividend to common shareholders.
Dec.	31	Declared the annual per share dividend on the outstanding preferred stock and a $1 per share dividend on the outstanding common stock, to be paid on January 30, 2017.

Required:

1.	Prepare journal entries to record the preceding transactions.
2.	Prepare the December 31, 2016, shareholders’ equity section (assume that 2016 net income was $225,000).