Global Marine obtained a charter from the state in January that authorized 1,000

Question

Global Marine obtained a charter from the state in January that authorized 1,000,000 shares of common stock, $5 par value. During the first year, the company earned $300,000 of net income and the following selected transactions occurred in the order given:

Reissued 5,000 shares from treasury for $39 per share.

Prepare journal entries to record each transaction. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

1. Record the issuance of 120,000 shares of common stock with a $5 par value for a price of $45 per share.

Record the purchase of 15,000 shares of previously issued common stock for a price of $40 per share.

Record the re-issuance of 5,000 shares of treasury stock previously purchased for a price of $40 per share and sold for $41 per share.

Record the re-issuance of 5,000 shares of treasury stock previously purchased for $40 per share and sold for $39 per share.

Global Marine obtained a charter from the state in January that authorized 1,000,000 shares of common stock, $5 par value. During the first year, the company earned $300,000 of net income and the following selected transactions occurred in the order given:

Explanation / Answer

Date Title Debit credit a cash [45 *120000] 5,400,000 common stock   [5*120000] 600,000 Additional paid in capital   [40*120000] 4,800,000 [being common stock issued] b Treasury stock    [15000 *40] 600,000 cash 600,000 [being stock reacquired recorded] c cash   [41 *5000] 205,000 Treasury stock    [40*5000] 200,000 Additional paid in capital -treasury stock 5,000 [being stock reissued recorded] d cash   [39*5000] 195,000 Additional paid in capital -treasury stock [1*5000] 5000 Treasury stock    [5000*40] 200,000

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