Exercise 11-7 Rinehart Corporation purchased from its stockholders 5,000 shares

Question

Exercise 11-7 Rinehart Corporation purchased from its stockholders 5,000 shares of its own previously issued stock for $250,000. It later resold 1,875 shares for $53 per share, then 1,875 more shares for $48 per share, and finally 1,250 shares for $42 per share. Prepare journal entries for the purchase of the treasury stock and the three sales of treasury stock. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit To record purchase from stockholders.) To record sales of shares at $53 per share.) (To record sales of shares at $48 per share.) (To record sale of shares at $42 per share.)

Explanation / Answer

1 Treasury Stock 250000 Cash 250000 2 Cash 99375 =1875*53 Treasury Stock 93750 =1875*50 Paid-in Capital from Treasury Stock 5625 3 Cash 90000 =1875*48 Paid-in Capital from Treasury Stock 3750 Treasury Stock 93750 =1875*50 4 Cash 52500 =1250*42 Paid-in Capital from Treasury Stock 1875 =5625-3750 Retained earnings 8125 Treasury Stock 62500 =1250*50

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