Treasury Stock, Cost and Par Value Methods On January 1, West Company had outsta

Question

Treasury Stock, Cost and Par Value Methods

On January 1, West Company had outstanding 10,000 shares of $10 par common stock, which had been originally issued at an average price of $35 per share. During the year, West engaged in the following treasury stock transactions:

1. Reacquired 1,000 shares of its common stock for $33 per share.

2. Reissued 600 shares of the treasury stock for $35 per share.

3. Reissued 300 shares of the treasury stock for $32 per share.

4. Retired the remaining 100 shares of treasury stock.

Prepare journal entries to record the preceding treasury stock transactions for West Company assuming it uses the par value method. For compound entries, if an amount box does not require an entry, leave it blank.

Explanation / Answer

Journal Entries

Particulars Debit Credit 1. Treasury Stock 33000 cash 33000 2. Cash 21000 Treasry stock 19800 Aditional paid in capital 1200 3. Cash 9600 Additional paid in capital 300 Treasury stock 9900 4. cash 3300 Treasury stock 3300

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