Reference no: EM132611708

The following shareholders' equity accounts are reported by Oriole Inc. on January 1:

Common shares (unlimited authorized, 157,500 issued) $2,520,000

Preferred shares ($4 cumulative, convertible, 100,000 authorized, 5,500 issued) 412,500

Contributed surplus-reacquisition of common shares 31,000

Retained earnings 1,265,000

The following selected transactions occurred during the year:

Feb.11 Issued 52,500 common shares at $20 per share.

Mar.2 Reacquired 20,000 common shares at $22 per share.

June14 Split the common shares 2 for 1 when the common shares were trading at $30 per share.

July25 Reacquired 430 preferred shares at $70 per share.

Sept.16 Reacquired 52,500 common shares for $17 per share.

Oct.27 Declared a 5% common stock dividend distributable on December 13 to shareholders of record on November 24. The fair value of the common shares on October 27 was $19 per share.

Dec.13 Distributed the stock dividend declared on October 27. The fair value of the common shares on December 13 was $21 per share.

Question 1: Prepare journal entries for the transactions.

Question 2: Show how each class of shares will be presented in the shareholders' equity section of the balance sheet at December 31.