As of December 31, 2019, Blue Spruce Ltd., a public company, has 52,000 common shares outstanding....

As of December 31, 2019, Blue Spruce Ltd., a public company, has 52,000 common shares outstanding. During 2020, Blue Spruce had the following transactions.

1.		Issued 6,000 common shares at $32 per share, less $5,000 in costs related to the issuance of the shares.
2.		Issued 4,280 common shares for land appraised at $176,360. The closing price for the shares traded on the TSX was $37 per share on the date of issuance.
3.		Purchased and retired 500 of the company’s shares at $31 per share. The repurchased shares have an average issue price per share of $34.

(a)

Prepare the journal entries to record the three transactions listed.

Expert Solution

Ans.

1.

Issued 6,000 common shares at $32 per share, less $5,000 in costs related to the issuance of the shares.


Account Title	Debit	Credit
Cash	$192,000
Additional paid in capital	$5,000
Common stock		$197,000
(Issue of 6,000 shares @32 per share and share issue expenses of 5,000)

2.

Issued 4,280 common shares for land appraised at $176,360. The closing price for the shares traded on the TSX was $37 per share on the date of issuance.

Account Title	Debit	Credit
Land	$173,360
Common Stock		$158,360
Additional Paid In Capital		$15,000
(Issue of 4280 shares @37 per share and share issued for land acquisition)

3.

Purchased and retired 500 of the company’s shares at $31 per share. The repurchased shares have an average issue price per share of $34.

Account Title	Debit	Credit
Common Stock	$17,000
Cash		$15,500
Additional Paid in Capital		$1,500
(Purchased and retirement of 500 shares)

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