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

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.

Solutions

Expert Solution

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.

ekkarill92 answered 1 year ago
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