Question

E 11-4A. Treasury Stock
Coastal Corporation issued 25,000 shares of $5 par value common stock at $15 per share and 6,000 shares of $50 par value, eight percent preferred stock at $85 per share.  Later, the company purchased 3,000 shares of its own common stock at $20 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 $25 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 $18 per share.  Prepare the journal entry to record the sale of this treasury stock.
a.		Debit Account	Credit Account	Debit Amount	Credit Amount
Common	Issuance
Preferred	Issuance
	Purchase
b.	Sale of TS
c.	Sale of TS

Answer 1

Journal Entries:

Date	particulars	Debit	Credit
	Cash (25,000*15)	375,000
	To Common Stock (25,000*5)		125,000
	To Paid-In-Capital InExcess of Par-Common		250,000
	(To record issue of common stock)
	Cash (6,000*85)	510,000
	To preferred stock (6,000*50)		300,000
	To Paid-In-Capital in excess of Par-preferred (6,000*(85-50))		210,000
	(To record issue of preferred stock)
	Treasury stock (3,000*20)	60,000
	To cash		60,000
	(To record purchase of own common stock)
	Cash (2,000*25)	50,000
	To Treasury stock (2,000*20)		40,000
	To Padi-In-Capital-Treasury (2,000*(25-20)		10,000
	(To record sale of treasury stock)
	Cash (1,000*18)	18,000
	Paid-In-Capital-Treaury (1,000(20-18))	2,000
	To Treasury stock (1,000820)		20,000
	(To record sale of treausry stock at 18 per share)