The charter for Zippy Inc. authorizes the company to issue 500,000 shares of $7, no-par preferred stock and 1,100,000 shares of common stock with $1 par value. During its start-up phase, Zippy Inc. computed the following transactions:
2012
April 6 Issued 550 shares of common stock to the promoters who organized the corporation, receiving cash of $16,500.
April 12 Issued 650 shares of preferred stock for cash of $28,000.
April 14 Issued 1,800 shares of common stock in exchange for land with a market value of $22,000.
Required:
1. Prepare the journal entries for the month of April, 2012.
2. Prepare the stockholder's equity section of Zippy's balance sheet at December 31, 2012. Assume that the company earned net income of $38,000 during this period.