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Sun Corporation received a charter that authorized the issuance of 85,000 shares of $7 par common stock and 20,000 shares of $75 par, 5 percent cumulative preferred stock. Sun Corporation completed the following transactions during its first two years of operation. Year 1

January 5	Sold 12,750 shares of the $7 par common stock for $9 per share.
January 12	Sold 2,000 shares of the 5 percent preferred stock for $85 per share.
April 5	Sold 17,000 shares of the $7 par common stock for $11 per share.
December 31	During the year, earned $319,400 in cash revenue and paid $240,500 for cash operating expenses.
December 31	Declared the cash dividend on the outstanding shares of preferred stock for Year 1. The dividend will be paid on February 15 to stockholders of record on January 10, Year 2.
December 31	Closed the revenue, expense, and dividend accounts to the retained earnings account.

Year 2

February 15	Paid the cash dividend declared on December 31, Year 1.
March 3	Sold 3,000 shares of the $75 par preferred stock for $95 per share.
May 5	Purchased 550 shares of the common stock as treasury stock at $14 per share.
December 31	During the year, earned $249,600 in cash revenues and paid $176,900 for cash operating expenses.
December 31	Declared the annual dividend on the preferred stock and a $0.75 per share dividend on the common stock.
December 31	Closed revenue, expense, and dividend accounts to the retained earnings account.

Required a. Prepare journal entries for these transactions for Year 1 and Year 2 and post them to T-accounts.

Cash Dividends Payable Year 2 Year 2 Beginning Balance Beginning Balance Ending Balance Ending Balance Retained Earnings Preferred Stock Year 2 Beginning Balance Year 2 Beginning Balance Ending Balance Ending Balance Common Stock Year 2 Beginning Balance Paidin Capital in Excess of ParPreferred Stoc Year 2 Beginning Balance Ending Balance Ending Balance Dividends Paidin Capital in Excess of Par-Common Stock Year 2 Beginning Balance Year 2 Beginning Balance Ending Balance Ending Balance Treasury Stock (Common) Service Revenue Year 2 Year 2 Beginning Balance Beginning Balance Ending Balance Ending Balance Operating Expenses Year 2 Beginning Balance Ending Balance Year 1 Cash Dividends Payable Year 1 Year 1 Ending Balance Ending Balance Retained Earnings Preferred Stock Year 1 Year 1 Ending Balance Ending Balance Common Stock Paidin Capital in Excess of ParPreferred Stock Year 1 Year 1 Ending Balance Ending Balance Dividends Paidin Capital in Excess of Par-Common Stock Year 1 Year 1 Ending Balance Ending Balance Service Revenue Operating Expenses Year 1 Year 1 Endina Balance Endina Balance

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