Question

Transfixed Corporation has 300,000 no par value common shares authorized, issued and outstanding which were all...

Transfixed Corporation has 300,000 no par value common shares authorized, issued and outstanding which were all issued at $ 40 per share. On February 28, 2020, Transfixed reacquired 6,000 shares at a cost of $ 38 per share. On October 20, 2020, the company purchased and cancelled an additional 4,000 shares. The purchase cost was $ 44 per share.

Instructions Prepare the journal entries to record the reacquisition of shares.

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Answer #1
Date Particular Debit Credit
28.02.2020 Treasury Stock 228000
Cash 228000
To record repurchase of shares
20.10.2020 Treasury Stock 176000
Cash 176000
To record repurchase of shares
20.10.2020 Common stock 160000
Additional paid-in capital 16000
Treasury Stock 176000
To record cancellation of shares
Note: It is assumed that only shares acquired on 20.10.2020 are cancelled as question is not clear about it.
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