5 Houghton s 31 par value common stock for 20 per share On J

5. Houghton s 31 par value common stock for $20 per share. On June 30.Houghton declared a cash dividand of $2.50 Company began business on January 1, 2015 by issuing all of ts 1.350,000 authorized shares of share to stookholders of record n uly 31. Houghton paid the cash dividend on August 30 On Houghton nesold 135,000 ofthese shares for $37 per share Prepare atl required for a transactionlevent, select \"No Jourmal Entry Required in the first account field) of the necessary journal entries to necord the events desorbed above (If no entry is Journal entry worksheet Record the issue of 1.350.000 authorized shares of $1 par value for $26 per share. Common Sock Capital b. Precare the oandders equaecton de talance sheec as of December 31, 205 ssuming thar the net income for the year was 5 000 00 s Equity Sheet as of 1 O Type here to search

Solution

Journal entry :

Stockholder\'s equity :

Transaction	account & explanation	debit	credit
1	Cash (1350000*26)	35100000
	Common Stock		1350000
	Paid in capital in excess of par value-Common Stock		33750000
	(To record issue common stock)
2	Cash dividend (1350000*2.5)	3375000
	Dividend payable		3375000
	(To record dividend declared)
3	Dividend payable	3375000
	Cash		3375000
	(To record dividend paid)
4	Treasury Stock (270000*31)	8370000
	Cash		8370000
	(To record Stock required)
5	Cash (135000*37)	4995000
	Treasury stock (135000*31)		4185000
	Paid in capital from sale of treasury stock		810000
	(To record sale of treasury stock)