5. Houghton s 31 par value common stock for $20 per share. On June 30.Houghton d

Question

5. Houghton s 31 par value common stock for $20 per share. On June 30.Houghton declared a cash dividand of $2.50 Company began business on January 1, 2015 by issuing all of ts 1.350,000 authorized shares of share to stookholders of record n uly 31. Houghton paid the cash dividend on August 30 On Houghton nesold 135,000 ofthese shares for $37 per share Prepare atl required for a transactionlevent, select "No Jourmal Entry Required in the first account field) of the necessary journal entries to necord the events desorbed above (If no entry is Journal entry worksheet Record the issue of 1.350.000 authorized shares of $1 par value for $26 per share. Common Sock Capital b. Precare the oandders equaecton de talance sheec as of December 31, 205 ssuming thar the net income for the year was 5 000 00 s Equity Sheet as of 1 O Type here to search

Explanation / Answer

Journal entry :

Stockholder's equity :

Transaction account & explanation debit credit 1 Cash (1350000*26) 35100000 Common Stock 1350000 Paid in capital in excess of par value-Common Stock 33750000 (To record issue common stock) 2 Cash dividend (1350000*2.5) 3375000 Dividend payable 3375000 (To record dividend declared) 3 Dividend payable 3375000 Cash 3375000 (To record dividend paid) 4 Treasury Stock (270000*31) 8370000 Cash 8370000 (To record Stock required) 5 Cash (135000*37) 4995000 Treasury stock (135000*31) 4185000 Paid in capital from sale of treasury stock 810000 (To record sale of treasury stock)

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