TRANSFER http: com/hm.tpx , c e Exam 3 Chapters 10-1 2. Houghton Company began b

Question

TRANSFER http: com/hm.tpx , c e Exam 3 Chapters 10-1 2. Houghton Company began business on January 1, 2015 by issuing all of its 1,500,000 authorized shares of its $2 par value common stock for $29 per share. On June 30, Houghton declared a cash dividend of $1.00 per share to stockholders of record on July 31. Houghton paid the cash dividend on August 30. On November 1, Houghton reacquired 300,000 of its own shares of stock for $34 per share. On December 22 Houghton resold 150,000 of these shares for $40 per share Required a. Prepare all of the necessary journal entries to record the events described above. (If no entry is required for a transactionlevent, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet Record the issue of 1,500,000 authorized shares of $2 par value for $29 per share. Note: Enter debits before credits. Transacti General Journal Debit Credit Record entry Clear entry View general journal

Explanation / Answer

a. Journal

b. Stockholder's equity

Transaction Account Name Debit Credit 1. Cash 43500000 Common stock 3000000 Additional paid in capital-common stock 40500000 2. Retained earnings 1500000 Dividend payable 1500000 3. Dividend payable 1500000 Cash 1500000 4. Treasury stock (300000 x $34) 10200000 Cash 10200000 5. Cash (150000 x $40) 6000000 Additional paid in capital-treasury stock (150000 x $6) 900000 Treasury stock (150000 x $34) 5100000

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