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In 2021, Western Transport Company entered into the treasury stock transactions described below. In 2019, Western...

In 2021, Western Transport Company entered into the treasury stock transactions described below. In 2019, Western Transport had issued 170 million shares of its $1 par common stock at $16 per share.

Required: Prepare the appropriate journal entry for each of the following transactions: (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)

On January 23, 2021, Western Transport reacquired 10 million shares at $19 per share.

On September 3, 2021, Western Transport sold 2 million treasury shares at $20 per share.

On November 4, 2021, Western Transport sold 2 million treasury shares at $17 per share.

Solutions

Expert Solution

Solution: The below are the appopriate journal entries:

Date

Account Titles and Explanation

Debit

Credit

Jan. 23

Treasury Stock (10M Shares*$ 19)

$      190

Cash

$        190

(Being Treasury Stock purchased)

Sept. 3

Cash (2M Shares* $20)

$       40

Additional Paid-In Cap - Treasury Stock (2M Shares*$1)

$            2

Treasury Stock (2M Shares*$19)

$          38

(Being treasury stock resold)

Nov. 4

Cash(2M Shares*$17)

$        34

Additional Paid-In Cap - Treasury Stock

$          2

Retained Earnings

$          2

Treasury Stock (2M Shares*$19)

$          38

(Being treasury stock resold)

ekkarill92 answered 2 years ago
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