Houghton Company began business on January 1, 2015 by issuing all of its 1,950,0
ID: 2596591 • Letter: H
Question
Houghton Company began business on January 1, 2015 by issuing all of its 1,950,000 authorized shares of its $1 par value common stock for $38 per share. On June 30, Houghton declared a cash dividend of $1.25 per share to stockholders of record on July 31. Houghton paid the cash dividend on August 30. On November 1, Houghton reacquired 390,000 of its own shares of stock for $43 per share. On December 22, Houghton resold 195,000 of these shares for $49 per share Required: a. Prepare all of the necessary journal entries to record the events described above. (If no entry is required for a transaction/event, select No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 2 3 4 Record the issue of 1,950,000 authorized shares of $1 par value for $38 per share. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journalExplanation / Answer
Date
Account Title
Debit
Credit
Jan1.
CASH (1950000*38)
$74,100,000
COMMON STOCK (1950000*1)
$1,950,000
ADDITIONAL PAID IN CAPITAL
$29,150,000
Jun-30
RETAINED EARNING
$2,437,500
DIVIDEND PAYABLE
$2,437,500
(1950000*1.25)
Aug 30.
DIVIDEND PAYABLE
$2,437,500
CASH
$2,437,500
Nov 1.
TREASURY STOCK
$16,770,000
CASH
$16,770,000
(390,000*43)
DEC 22.
CASH (195000*49)
$9,555,000
TREASURY STOCK (195000*43)
$8,385,000
ADDITIONAL PAID IN CAPITAL
$1,170,000
STOCKHOLDER EQUITY
1,950,000 common stock authorized and issued shares of its $1 par value
$1,950,000
Additional Paid in Capital ($29,150,000+$1,170,000)
$30,320,000
Total
$32,270,000
Less : Treasury stock (195000*43)
(8,385,000)
Retained earnings ($12,000,000-$2,437,500)
$9,562,500
TOTAL STOCKHOLDER EQUITY
$33,447,500
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Date
Account Title
Debit
Credit
Jan1.
CASH (1950000*38)
$74,100,000
COMMON STOCK (1950000*1)
$1,950,000
ADDITIONAL PAID IN CAPITAL
$29,150,000
Jun-30
RETAINED EARNING
$2,437,500
DIVIDEND PAYABLE
$2,437,500
(1950000*1.25)
Aug 30.
DIVIDEND PAYABLE
$2,437,500
CASH
$2,437,500
Nov 1.
TREASURY STOCK
$16,770,000
CASH
$16,770,000
(390,000*43)
DEC 22.
CASH (195000*49)
$9,555,000
TREASURY STOCK (195000*43)
$8,385,000
ADDITIONAL PAID IN CAPITAL
$1,170,000
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