Question

The transaction of Easy Company are presented below.

• - On May 10, 2019: Issued 40,000 shares with $0.50 par value for $1.50/share.

• - On July 12, 2019: Repurchased 10,000 shares for $0.75/share.

• - On September 5, 2019: Sold 5,000 treasure shares for $1per share.

  Required: Please prepare the necessary journal entries and present how equity section is seen at the end of the year.

Answer 1

Date	Account Titles and Explanation	Debit	Credit
May 10, 2019	Cash (4,0000 shares x $1.50)	$60,000
	Common stock (40,000 shares x $0.50)		$20,000
	Additional paid in capital in excess of par - Common stock		$40,000
July 12, 2019	Treasury stock (10,000 shares x $0.75)	$7,500
	Cash		$7,500
September 5, 2019	Cash (5,000 shares x $1)	$5,000
	Treasury stock (5,000 shares x $0.75)		$3,750
	Additional paid in capital in excess of par - Treasury stock		$1,250

Stockholders' Equity
Paid-in capital:
Common stock, $0.50 par	$20,000
Paid-In Capital in Excess of Par—Common Stock	$40,000
		$60,000
Paid-In Capital from Sale of Treasury Stock		$1,250
Total paid-in capital		$61,250
Less: Treasury stock		$3,750
Total stockholders’ equity			$57,500