Accounting & Bookkeeping & Small Business Forum

[MorningSky]

Hey guys, I'm stuck trying to answer this problem.

Could any of you guys try to help me label the credits and debits to this problem? I'm bad at journal entries.

The question is as followed:

On January 1, 2007, Caldwell Corporation had 75,000 shares of $1 par value common stock issued and outstanding. During the year, the following transactions occurred:

Mar. 1, Issued 45,000 shares of common stock for $675,000 total.
June 1, Declared a cash dividend of $2.00 per share to stockholders of record on June 15
June 30, Paid the $2.00 cash dividend previously declared on June 1.
Dec. 1, Purchased 4,000 shares of common stock for the treasury for $18 per share
Dec. 15, Declared a cash dividend on outstanding shares of $2.50 per share to stockholders of record on December 31

Instructions:

Prepare journal entries to record the above transactions. Clearly label debits with DR and credits with CR and be sure to put the date for each transaction.

[MorningSky]

Please help. Anyone?

[stasia2003]

MorningSky wrote: Hey guys, I'm stuck trying to answer this problem.

Could any of you guys try to help me label the credits and debits to this problem? I'm bad at journal entries.

The question is as followed:

On January 1, 2007, Caldwell Corporation had 75,000 shares of $1 par value common stock issued and outstanding. During the year, the following transactions occurred:

Mar. 1, Issued 45,000 shares of common stock for $675,000 total.
June 1, Declared a cash dividend of $2.00 per share to stockholders of record on June 15
June 30, Paid the $2.00 cash dividend previously declared on June 1.
Dec. 1, Purchased 4,000 shares of common stock for the treasury for $18 per share
Dec. 15, Declared a cash dividend on outstanding shares of $2.50 per share to stockholders of record on December 31

Instructions:

Prepare journal entries to record the above transactions. Clearly label debits with DR and credits with CR and be sure to put the date for each transaction.

I can't really help you too much even though I was an accounting major. I hated recording stocks/securities.

I won't give you the entire answer because if I had to suffer through this, so do you. :lol:

When you issue stock, it's a debit to cash and a credit to Common/Preferred Stock.

When you declare a dividend, it's a Debit to Dividends and a Credit to Dividends Payable.

To pay the dividends, Debit Dividends Payable and Credit Cash.

To purchase treasury stock, it's a Debit to Treasury Stock and a Credit to Cash.

I probably just gave you 90% of the answer but take it and run with it. 8)