Question

Tamarisk, Inc. is authorized to issue 2,250,000 shares of $1 par value common stock. During 2020, the company has the following stock transactions.

Jan. 15 Issued 880,000 shares of stock at $7 per share.
Sept. 5 Purchased 28,000 shares of common stock for the treasury at $8 per share.
Dec. 6 Declared a $0.50 per share dividend to stockholders of record on December 20, payable January 3, 2021.
Journalize the transactions for Tamarisk, Inc.

Answer 1

Date Account Titles and Explanation Debit$ Credit$

Jan.15 Cash (880,000*$7) 6,160,000

Common Stock , $1 Par value 880,000

Paid in capital in excess of par value 5,280,000

Sept.5 Treasury Stock 224,000

Cash (28,000*8) 224,000

Dec.6 Retained earnings 440,000

Cash Dividend Payable 440,000

(880,000*0.50)