Reference no: EM132992456

Red Corporation has authorized share capital of 600,000 common shares and 320,000 preferred shares. On January 1, 2020, the balance in its shareholders equity included:

9,500 common shares valued at $56,400,
3,600 preferred shares valued at $38,200 and
Retained earnings of $22,000.
Profit for the year ending December 31, 2020 was $29,000. No dividends were declared or paid to any shareholders during 2020.

During 2020, Four Corporation had the following share transactions:

May 1 Issued 12,000 common shares for $9 each.
July 30 Issued 4,500 preferred shares for $16 each.
Oct 8 Issued 33,000 common shares in exchange for Building valued at $310,000.

Required:

Problem a) Journalize the share transactions during 2020.

Problem b) Prepare the equity section of Red Corporation's balance sheet at December 31, 2020.