The Murphy Corporation is authorized to issue 500,000 shares of $1 par value com

Question

The Murphy Corporation is authorized to issue 500,000 shares of $1 par value common stock. During 2019, the company has the following stock transactions. Jan. 15 Issued 200,000 shares of stock at $6 per share. Sept. 5 Purchased 30,000 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 15, payable January 5, 2020. Instructions Journalize the transactions for the Murphy Corporation on journal paper. OMIT explanations

Explanation / Answer

Stock transactions:

Trading securities:

Journal:

Date Account Debit Credit Info jan.15 Cash          1,200,000 Total cash received= 200000*6 Common stock              200,000 Face value of stock issued= 200000*1 Additional paid in capital- common stock          1,000,000 Excess received over face value Sep.5 Treasury stock              240,000 purchase amount= 30000*8 Cash              240,000 Dec.6 Retained earnings                85,000 [dividend= stock outstanding *0.5= (200000-30000)*0.5= 85000 Dividends payable                85,000 Dec.15 Dividends payable                85,000 Cash                85,000

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