Question

Treasury Stock

Coastal Corporation issued 25,000 shares of $14 par value common stock at $26 per share and 6,000 shares of $59 par value, eight percent preferred stock at $85 per share. Later, the company purchased 3,000 shares of its own common stock at $29 per share.

a. Prepare the journal entries to record the share issuances and the purchase of the common shares.
b. Assume that Coastal sold 2,000 shares of the treasury stock at $33 per share. Prepare the general journal entry to record the sale of this treasury stock.
c. Assume that Coastal sold the remaining 1,000 shares of treasury stock at $23 per share. Prepare the journal entry to record the sale of this treasury stock.

General Journal
Ref.	Description	Debit	Credit
a.	AnswerCashCommon StockPaid-in-Capital in Excess of Par Value - Common Stock8 Percent Preferred StockPaid-in-Capital in Excess of Par Value - Preferred StockTreasury Stock - CommonPaid-in-Capital from Treasury Stock.	Answer	Answer
	Common Stock	Answer	Answer
	AnswerCashCommon StockPaid-in-Capital in Excess of Par Value - Common Stock8 Percent Preferred StockPaid-in-Capital in Excess of Par Value - Preferred StockTreasury Stock - CommonPaid-in-Capital from Treasury Stock.	Answer	Answer
	Issued common stock.
	AnswerCashCommon StockPaid-in-Capital in Excess of Par Value - Common Stock8 Percent Preferred StockPaid-in-Capital in Excess of Par Value - Preferred StockTreasury Stock - CommonPaid-in-Capital from Treasury Stock.	Answer	Answer
	8 Percent Preferred Stock	Answer	Answer
	AnswerCashCommon StockPaid-in-Capital in Excess of Par Value - Common Stock8 Percent Preferred StockPaid-in-Capital in Excess of Par Value - Preferred StockTreasury Stock - CommonPaid-in-Capital from Treasury Stock.	Answer	Answer
	Issued preferred stock.
	AnswerCashCommon StockPaid-in-Capital in Excess of Par Value - Common Stock8 Percent Preferred StockPaid-in-Capital in Excess of Par Value - Preferred StockTreasury Stock - CommonPaid-in-Capital from Treasury Stock.	Answer	Answer
	AnswerCashCommon StockPaid-in-Capital in Excess of Par Value - Common Stock8 Percent Preferred StockPaid-in-Capital in Excess of Par Value - Preferred StockTreasury Stock - CommonPaid-in-Capital from Treasury Stock.	Answer	Answer
	Acquired common stock.
b.	AnswerCashCommon StockPaid-in-Capital in Excess of Par Value - Common Stock8 Percent Preferred StockPaid-in-Capital in Excess of Par Value - Preferred StockTreasury Stock - CommonPaid-in-Capital from Treasury Stock.	Answer	Answer
	AnswerCashCommon StockPaid-in-Capital in Excess of Par Value - Common Stock8 Percent Preferred StockPaid-in-Capital in Excess of Par Value - Preferred StockTreasury Stock - CommonPaid-in-Capital from Treasury Stock.	Answer	Answer
	Paid-in-Capital from Treasury Stock.	Answer	Answer
	Sold shares of treasury stock.
c.	AnswerCashCommon StockPaid-in-Capital in Excess of Par Value - Common Stock8 Percent Preferred StockPaid-in-Capital in Excess of Par Value - Preferred StockTreasury Stock - CommonPaid-in-Capital from Treasury Stock.	Answer	Answer
	Paid-in-Capital from Treasury Stock	Answer	Answer
	AnswerCashCommon StockPaid-in-Capital in Excess of Par Value - Common Stock8 Percent Preferred StockPaid-in-Capital in Excess of Par Value - Preferred StockTreasury Stock - CommonPaid-in-Capital from Treasury Stock.	Answer	Answer
	Sold shares of treasury stock.

Answer 1

	Description	Debit	Credit
a	Cash	650000		=25000*26
	Common Stock		350000	=25000*14
	Paid-in-Capital in Excess of Par Value - Common Stock		300000
	Issued common stock.
	Cash	510000		=6000*85
	8 Percent Preferred Stock		354000	=6000*59
	Paid-in-Capital in Excess of Par Value - Preferred Stock		156000
	Issued preferred stock.
	Treasury Stock - Common	87000		=3000*29
	Cash		87000
	Acquired common stock.
b	Cash	66000		=2000*33
	Treasury Stock - Common		58000	=2000*29
	Paid-in-Capital from Treasury Stock.		8000
	Sold shares of treasury stock.
c	Cash	23000		=1000*23
	Paid-in-Capital from Treasury Stock	6000
	Treasury Stock - Common		29000	=1000*29
	Sold shares of treasury stock.