On January 1, 2017, the stockholders’ equity section of Newlin Corporation shows
ID: 2455010 • Letter: O
Question
On January 1, 2017, the stockholders’ equity section of Newlin Corporation shows common stock ($5 par value) $1,500,000; paid-in capital in excess of par $1,020,000; and retained earnings $1,200,000. During the year, the following treasury stock transactions occurred.
Sold 9,500 treasury shares for cash at $14 per share.
Journalize the treasury stock transactions
Mar. 1 Purchased 52,000 shares for cash at $15 per share. July 1 Sold 11,500 treasury shares for cash at $17 per share. Sept. 1Sold 9,500 treasury shares for cash at $14 per share.
Explanation / Answer
Journal entries:
Mar 1 Common stock A/c (52,000*5) Dr. 260,000
Paid in capital in excess of par A/c Dr. 520,000
To Equity shareholder A/c Cr. 780,000
[Being Shares bought back]
Equity shareholders A/c Dr. 780,000
To Cash A/c. 780,000
[Being cash paid to shareholders]
July 1 Bank A/c Dr. 195,500
To Common stock A/c Cr. 57,500
To Paid in capital in excess of par 138,000
[Being stock issued for premium]
Sept. 1 Bank A/c Dr. 133,000
To Common stock A/c Cr. 47,500
To Paid in capital in excess of par 85,500.
[Being stock issued for premium]
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