Problem 12-8B Share transactions, dividends, statement of changes in equity LO2, 3, 4, 5, 6 CHECK FIGURES: 2. Retained earnings, Dec. 31, 2020 = $754,500; 3. Equity, Dec. 31, 2020 = $4,345,500 Pace Oil & Gas Corp. began operations in 2018. Its balance sheet reported the following components of equity on December 31, 2018. Pace Oil & Gas Corp. Equity Section of the Balance Sheet December 31, 2018 Contributed capital: Preferred shares, $1.80 non-cumulative, unlimited shares authorized; 25,000 shares issued and outstanding ............. . . . . . ........... $ 780,000 Common shares, unlimited shares authorized; 162,500 shares issued and outstanding...................... Total contributed capital ...................................... . . . . . ... 1,755,000 Retained earnings ..................................................... $2,535,000 Total equity ........................................... . . . . . . .. .... 681,000 . . . . . .............. . . . . . . . . . .... $3,216,000 858CHAPTER 12 Organization and Operation of Corporations The corporation completed these transactions during 2019 and 2020: 2019 Jan. Sold 50,000 common shares at $11.40 per share. LO The directors declared the first cash dividend totalling $191,250 payable on Feb. 28 to the Feb. 5 shareholders of record. Feb. 28 Paid the dividends declared on January 5. July Issued preferred shares for a total of $486,000. The average issue price was $32.40 per share. Dec. 31 Closed the dividend accounts along with the Income Summary account, which reflected profit earned during 2019 of $768,000. 2020 Sept. LO The directors declared a $1.80 cash dividend per preferred share and a $0.90 per common share cash dividend payable on October 28 to the October 5 shareholders of record. Oct. co Paid the dividends declared on September 5. Dec. 31 Closed the dividend accounts along with the $240,000 debit balance in the Income Summary account. Required 1. Prepare journal entries to record the transactions and closings for 2019 and 2020. 2. Prepare the statement of changes in equity for the year ended December 31, 2020. 3. Prepare the equity section of the company's balance sheet as of December 31, 2020. ANALYTICAL AND REVIEW PROBLEMS