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1. The owners are desirous of comparing serval financial transactions and possible outcomes to assist in guiding their decision-making process. They assume that the company will be formed on January 1, 2020. In addition, E&B Comic Bookstore Companys charter will authorize 1,200,000 shares of common stock (to be divided into two classes (700,000 shares class A -voting rights and 500,000 shares class B -nonvoting rights) and 400,000, $X par value (see info below),5% cumulative preferred stock.

1. Issued 30% of authorized shares of class A common stock. Stock has par value of $20.00 per share and was issued at $28.00 per share.
2. Issued 30% of authorized shares of no-par class B stock and issued at $25.00 per share
3. Issued 50% of authorized shares of preferred stock at par value of $25.00.
4. Exchanged 40% of authorized shares of class A common stock for Office Furniture and Equipment with an appraised value of $4,000,000.00 and Motor Truck with an appraised value of $10,000,000.00. At par value $20.00
5. Earned Net income $1,500,000.00.
6. Declared interim dividends for preferred shareholders as well as $.80 per share to common stockholders.

Using the info above and as a guide:

7. Prepare the journal entries with narrations to record the following:
   • The issuances of stock.
   • Close out net income to retained earnings.
   • Dividend declared.
   • Close out dividend to retained earnings.

7. Prepare the companys Stockholders equity section of the balance sheet at December 31, 2020. (Hint!!!!!!!) The following information must be clearly stated/shown:
   • information on par or par values for all classes of shares which must be shown separately.
   • the number of shares authorized and issued where necessary.
   • the sub total for the total paid in capital.
   • Retained earnings.
   • total stockholders equity.

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