Exercise 11-7 Rinehart Corporation purchased from its stockholders 5,300 shares of its own previously issued stock...

Exercise 11-7

Rinehart Corporation purchased from its stockholders 5,300 shares of its own previously issued stock for $265,000. It later resold 1,600 shares for $53 per share, then 1,600 more shares for $48 per share, and finally 2,100 shares for $42 per share.

Prepare journal entries for the purchase of the treasury stock and the three sales of treasury stock.

Expert Solution

Treasury stock [5300*$50]	$ 2,65,000
Cash		$ 2,65,000
[To record purchase of own shares]

Cash [1600*$53]	$ 84,800
Paid in capital-Treasury stock		$ 4,800
Treasury stock [1600*50]		$ 80,000
[To record resale of treasury stock]

Cash [1600*$48]	$ 76,800
Paid in capital-Treasury stock	$ 3,200
Treasury stock [1600*50]		$ 80,000
[To record resale of treasury stock]

Cash [2100*$42]	$ 88,200
Paid in capital-Treasury stock[4800-3200]	$ 1,600
Retained earnings	$ 15,200
Treasury stock [2100*50]		$ 1,05,000
[To record resale of treasury stock]

ekkarill92 answered 2 months ago

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