Temte Corporation is authorized to issue 1,000,000 shares of no-par common stock and 250,000 shares of 6 percent, $25 par value, cumulative preferred stock. These events affected stockholders’ equity during the first year of operations:

Question

1. 125,000 shares of common stock were sold for $20 per share.
2. 25,000 shares of preferred stock were sold for $40 per share.
3. A building with a fair market value of $280,000 was acquired for a cash payment of $112,000 and 7,000 shares of common stock.
4. 15,000 shares of common stock were issued for $270,000 cash.
5. A dividend of $.50 per share for common and $1.50 per share for preferred stock was declared.
Required:
A. Record the transactions described above.
B. Prepare the stockholders’ equity section of the balance sheet for December 31 assuming that Temte Corporation generated $615,000 of income.