Treasury Stock Coastal Corporation issued 25,000 shares of $7 par value common s
ID: 2517563 • Letter: T
Question
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.
Explanation / Answer
Answer
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
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
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