Response to the following problem:
Crystal Clear Electronics Inc. was incorporated on January 1, 2016 and was authorized under its charter to issue the following shares - 20,000 non-cumulative, non-voting, 5% preferred shares and an unlimited number of no par-value, voting common shares.
Required:
1. Prepare journal entries to record the following 2016 transactions:
a. Issued 3,000 preferred shares for $6 cash each on January 2.
b. Issued 2,000 common shares for $2 cash each on January 2.
c. Issued 5,000 preferred shares for $5 cash each on January 12.
d. Issued 1,000 common shares for $1 cash each on August 1.
e. Issued 500 preferred shares for land valued at $15,000 on December 15.
2. Prepare the shareholders' equity section of the balance sheet at December 31, 2016 and the related note to the financial statements.
3. On December 15, 2017, the common shares were split 2 for 1.
Assuming no other transactions occurred during 2017, prepare the statement of changes in equity for the years ended December 31, 2016 and 2017.