Question

A company has 10,000 shares of $10 par common stock outstanding. Prepare entries to record the following:

a. Purchased 1,000 shares of treasury stock at $12. The treasury stock is accounted for by the cost method. There were no previous purchases of treasury shares. If an amount box does not require an entry, leave it blank.

b. Sold 500 shares of treasury stock at $15. If an amount box does not require an entry, leave it blank.

c. Purchased equipment for $75,000, paying $25,000 in cash and issuing 4,000 shares of common stock for the remaining. If an amount box does not require an entry, leave it blank.

d. Sold 500 shares of treasury stock at $11. If an amount box does not require an entry, leave it blank.

Answer 1

No.	General Journal	Debit	Credit
1	Treasury Stock, Common (1,000 shares @ $12)	$            12,000
	Cash		$            12,000
2	Cash	$               7,500
	Treasure Stock, Common (500 shares @ $12)		$               6,000
	Paid in Capital from Treasury Stock (500 shares @ $3)		$               1,500
3	Equipment	$            75,000
	Cash		$            25,000
	Common Stock		$            40,000
	Paid in capital in excess of par value, common stock		$            10,000
4	Cash	$               5,500
	Paid in Capital from Treasury Stock (500 shares * $1)	$                  500
	Treasure Stock, Common (500 shares @ $12)		$               6,000

Note: For exact wording of accounting titles, please refer to your question. If you still have any doubt, feel free to ask in comment section.