On January 1, 2010, Anderson Corporation had 60,000 shares of $1 par value commo
ID: 2505620 • Letter: O
Question
On January 1, 2010, Anderson Corporation had 60,000 shares of $1 par value common stock issued and outstanding. During the year, the following transactions occurred:
Mar. 1 Issued 30,000 shares of common stock for $300,000.
June 1 Declared a cash dividend of $1.50 per share to stockholders of record on June 15.
June 30 Paid the $1.50 cash dividend.
Dec. 1 Purchased 5,000 shares of common stock for the treasury for $20 per share.
Dec. 15 Declared a cash dividend on outstanding shares of $2 per share to stockholders of record on December 31.
Instructions
Prepare journal entries to record the above transactions. Use the template below.
Date
Account
Debit
Credit
Date
Account
Debit
Credit
Explanation / Answer
The words debit and credit derive from the Latin debitur and creditur, which are abbreviated Dr and Cr.
The rule that total debits equal total credits applies when all accounts are totaled.
Mar 1
Dr. Cash $400,000
Cr Common Stocks $25,000
Cr. Additional Paid-in Capital $375,000
(issue 25,000, $1 per common stock )
June 1
Dr. Retained Earnings $170,000
Cr. Dividend Payable $170,000
(declare $2 cash dividend on 85,000 common shares)
June 30
Dr. Dividend Payable $170,000
Cr. Cash $170,000
(pay $2 cash dividend declared )
Dec 1
Dr. Treasury Stock $110,000
Cr. Cash $110,000
(purchase 5,000 treasury shares at $22)
Dec 15
Dr. Retained Earnings $180,000
Cr. Dividend Payable $180,000
(declare cash dividend of $2.25 on 80,000 common shares)
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