On April 2 a corporation purchased for cash 6,000 shares of its own $10 par common stock at $29 a share. It sold 4,000 of the treasury shares at $32 a share on June 10. The remaining 2000 shares were sold on November 10 for $25 a share.
a. Journalize the entries to record the purchase (treasury stock is recorded at cost).
Apr. 2 b. Journalize the entries to record the sale of the stock. If an amount box does not require an entry, leave it blank or enter "0".
Jun. 10 Nov. 10

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Tundexi Tundexi · Answer 1 · 2022-12-19T22:30:54+01:00

The journal entries to record the purchase are:

The journal entries to record the sale of the stock are:

April 2:

DR Treasury Stock ................................................$174,000

CR Cash....................................................................................$174,000

(To record purchase of Treasury Stock)

Working

= 6,000* $29

= $174,000

June 10:

DR Cash ...............................................................................$128,000

CR Treasury Stock...............................................................................$116,000

CR Paid in Capital Treasury Stock ..................................................$12,000

Working

Cash = 32 * 4,000 = $128,000

Treasury stock ( recorded at cost) = 29 * 4,000 = $116,000

Pain in Cap = 128,000 - 116,000 = $12,000

Nov 10,

DR Cash ...................................................................................$50,000

DR Paid in Capital Treasury Stock......................................$8,000

CR Treasury Stock..................................................................................$58,000

Working

Cash = 2,000 * 25 = $50,000

Treasury Cap = 2,000 * 29 = $58000

Paid in Cap = 58000 - 50000 = $8,000