Houghton Company began business on January 1, 2015 by issuing all of its 1,200,0

Question

Houghton Company began business on January 1, 2015 by issuing all of its 1,200,000 authorized shares of its $2 par value common stock for $23 per share. On June 30, Houghton declared a cash dividend of $1.75 per share to stockholders of record on July 31. Houghton paid the cash dividend on August 30. On November 1, Houghton reacquired 240,000 of its own shares of stock for $28 per share. On December 22, Houghton resold 120,000 of these shares for $34 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 5 Record the issue of 1,200,000 authorized shares of $2 par value for $23 per share Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal

Explanation / Answer

Date Account titles & Explanations debit Credit 1/1/2015 Cash 27600000 common stock (1,200,000*2) 2400000 paid in capital in excess of par 25200000 30-Jun Cash dividend 2100000 dividends payable 2100000 (1,200,000*1.75) 30-Aug dividends payable 2100000 cash 2100000 1-Nov Treasury stock 6720000 Cash (240,000*28) 6720000 22-Dec Cash (120,000*34) 4080000 Treasury stock (120,000*28) 3360000 paid in capital in excess-TS (120,000*6) 720000 b) Houghton company Common stock 2400000 paid in capital in excess of par 25200000 paid in capital in excess-TS 720000 Retained earnings 2400000 total 30720000 less:Treasury stock -3360000 Stockholders Equity 27360000

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