P12.3 (LO 2, 4) The equity accounts of Terrell SE on January 1, 2020, were as follows. Share Capital Preference (9%, €50 par, cumulative, 10,000 shares authorized) € 400,000 1,000,000 Share Capital-Ordinary (€ 1 stated value, 2,000,000 shares authorized) Share Premium-Preference 60- 100.000 Share Premium Ordinary 1,450,000 Retained Earnings 1,816,000 Treasury Shares-Ordinary (20,000 shares) 50.000 During 2020, the company had the following transactions and events pertaining to its equity. Feb. 1 Issued 30,000 ordinary shares for €120,000. Apr. 14 Sold 9,000 treasury shares-ordinary for €42.000. Sept. 3 Issued 7.000 ordinary shares for a patent valued at €32,000. Nov. 10 Purchased 1.000 ordinary shares for the treasury at a cost of €6.000. Dec. 31 Determined that net income for the year was €452,000. bo No dividends were declared during the year. Instructions a. Journalize the transactions and the closing entry for net income. b. Enter the beginning balances in the accounts, and post the journal entries to the equity accounts. (Use J5 for the posting reference.) c. Prepare an equity section at December 31, 2020, including the disclosure of the preference divi- dends in arrears.

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