Treasury Stock Coastal Corporation issued 25,000 shares of $7 par value common stock at $19 per...

Treasury Stock

Coastal Corporation issued 25,000 shares of $7 par value common stock at $19 per share and 6,000 shares of $52 par value, eight percent preferred stock at $80 per share. Later, the company purchased 3,000 shares of its own common stock at $22 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 $26 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 $19 per share. Prepare the journal entry to record the sale of this treasury stock.

Expert Solution

All working forms part of the answer
Journal Entries

Transactions	General Journal	Debit	Credit
(a) Issue of Common Stock	Cash [25000 x 19]	$ 4,75,000.00
	Common Stock [25000 x 7]		$ 1,75,000.00
	Additional Paid in capital in excess of Par - Common Stock [25000 x 12]		$ 3,00,000.00

(a) Issue of Preference Stock	Cash [6000 x 80]	$ 4,80,000.00
	8% Preferred Stock [6000 x 52]		$ 3,12,000.00
	Additional Paid in capital in excess of Par - Preferred Stock [6000 x 28]		$ 1,68,000.00

(a) Purchase of Treasury Stock	Treasury Stock [3000 x 22]	$ 66,000.00
	Cash		$ 66,000.00

(b) Sale of 2000 treasury Stock	Cash [2000 x 26]	$ 52,000.00
	Treasury Stock [2000 x 22]		$ 44,000.00
	Additional Paid in capital in excess of Par - Common Stock [2000 x 4]		$ 8,000.00

(c) Sale of 1000 treasury Stock	Cash [1000 x 19]	$ 19,000.00
	Additional Paid in capital in excess of Par - Common Stock [1000 x 3]	$ 3,000.00
	Treasury Stock [1000 x 22]		$ 22,000.00

ekkarill92 answered 1 year ago

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