Houghton Company began business on January 1, 2015 by issuing all of its 1,800,0

Question

Houghton Company began business on January 1, 2015 by issuing all of its 1,800,000 authorized shares of its $2 par value common stock for $35 per share. On June 30, Houghton declared a cash dividend of $2.50 per share to stockholders of record on July 31. Houghton paid the cash dividend on August 30. On November 1, Houghton reacquired 360,000 of its own shares of stock for $40 per share. On December 22, Houghton resold 180,000 of these shares for $46 per share. Required: a. Prepare all of the necessary journal entries to record the events described above.

Explanation / Answer

Solution:

Date General Journal Debit Credit January 1 Cash (1,800,000 * 35) 63,000,000 Common Stock (1,800,000 * 2)            3,600,000 Contributed Capital in Excess of Par- Common          59,400,000 June 30 Retained Earnings            4,500,000 Dividends Payable (1,800,000 * 2.5)            4,500,000 August 30 Dividends Payable            4,500,000 Cash            4,500,000 Nov 1 Treasury Stock 14,400,000 Cash (360,000 * 40)          14,400,000 Dec 22 Cash            8,280,000 Treasury Stock (180,000 * 46)            8,280,000

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.