Treasury Stock Inland Corporation issued 50,000 shares of $4 par value common st

Question

Treasury Stock Inland Corporation issued 50,000 shares of $4 par value common stock at $25 per share and 9,000 shares of $36 par value, ten percent preferred stock at $102 per share. Later, the company purchased 2,000 shares of its own common stock at $28 per share. a. Prepare the journal entries to record the share issuances and the purchase of the common shares. b. Assume that Inland sold 1,500 shares of the treasury stock at $34 per share. Prepare the general journal entry to record the sale of this treasury stock. c. Assume that Inland sold the remaining 500 shares of treasury stock at $24 per share. Prepare the journal entry to record the sale of this treasury stock.

Explanation / Answer

a.) Issuance of common stock

Cash......Dr 12,50,000

Common Stock(at $4par)........Cr 2,00,000

Additional Paid in Capital........Cr 10,50,000

Issuance of 10% preferred stock

Cash......Dr 91,800

Preference Shares................Cr 32,400

Additional Paid in Capital.....Cr 59,400

Repurchase of Stock

Capital.....Dr 56,000

Cash.....Cr 56,000

b.) Sale of Treasury stock

Cash......Dr 51,000

Treasury Capital......Cr 51,000

c.) Sale of further Treasury stock

Cash......Dr 12,000

Treasury Capital.......Cr 12,000

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