Problem $8-25($Static$)$ Common and preferred stock$$issuances and dividends LO $8-1,8-2,8-3$

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Homestead Oil Corporation was incorporated on January $1,2022,$ and issued the following stock for cash:

$600,000$ shares of no$-$par common stock were authorized; $120,000$ shares were issued on January $1,2022,$ at $$26$ per share.

$100,000$ shares of $$100$ par value, $5\mathrm{.}5\%$ cumulative, preferred stock were authorized; $70,000$ shares were issued on January $1,2022,$ at $$109$ per share.

Net income for the years ended December $31,2022$ and $2023$ was $$2,100,000$ and $$4,700,000,$ respectively.

No dividends were declared or paid during $2022.$ However, on December $27,2023,$ the board of directors of Homestead declared dividends of $$1,190,000,$ payable on February $11,2024,$ to holders of record as of January $16,2024.$

Problem $8-25($Static$)$ Part a $-$ Horizontal Model

Required:

Use the horizontal model for the issuance of common stock and preferred stock on January $1,2022.$ Indicate the financial statement effect.

Use the horizontal model for the declaration of dividends on December $27,2023.$ Indicate the financial statement effect.

Use the horizontal model for the payment of dividends on February $11,2024.$ Indicate the financial statement effect.