Jude Limited has been authorized to issue 20,000 £100 par value, 10%, noncumulative preference shares and 1,000,000 no-par ordinary shares. The corporationassigned a £2.50 stated value to the ordinary shares. At December 31, 2017, the ledgercontained the following balances pertaining to equity.Share Capital—Preference £ 120,000Share Premium—Preference 12,000Share Capital—Ordinary 1,000,000Share Premium—Ordinary 1,600,000Treasury Shares—Ordinary (1,000 shares) 9,000Share Premium—Treasury 1,000Retained Earnings 82,000The preference shares were issued for land having a fair value of £132,000. Allordinary shares issued were for cash. In November, 1,500 ordinary shares werepurchased for the treasury at a per share cost of £9. In December, 500 treasury shareswere sold for £11 per share. No dividends were declared in 2017.InstructionsTotal equity £2,806,000

a. Prepare the journal entries for the:

1. Issuance of preference shares for land.

2. Issuance of ordinary shares for cash.

3. Purchase of treasury shares (ordinary) for cash.

4. Sale of treasury shares for cash.

b. Prepare the equity section at December 31, 2017.Prepare dividend entries and equity section.

Answer rating: 100% (QA)

a Debit Credit 1 Land 13200000 Share CapitalPreference 12000000 Share Premium Preference 1200000 ... View the full answer