Reference no: EM132588254

AIM Inc. showed the following equity account balances on the December 31, 2019, balance sheet:

Common shares, unlimited authorized shares, 883,400 shares issued and outstanding$7,597,240

Retained earnings 1,992,900

During 2020, the following selected transactions occurred:

• Feb.10 Repurchased and retired 146,200 common shares at $10.00 per share; this is the first retirement recorded by AIM.
• May15 Declared a 2:1 share split to shareholders of record on June 1, distributable June 15.
• Dec.1 Declared a 10% share dividend to shareholders of record on December 10, distributable December 20. The market prices of the shares on December 1, December 10, and December 20 were $6.00 $6.50, and $4.80, respectively. 20 Distributed the share dividend declared December 1. 31 Closed the credit balance of $839,307 in the Income Summary account.

Required:

Question a. Journalize the transactions above (assuming the retirements were the first ever recorded by AIM Inc.). The company does not use a share dividends account. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Question b. Prepare the equity section on the December 31, 2020, balance sheet.