Question

ABC Corporation has 10,000 shares $2 par value common stock issued and outstanding. Record the following transactions:

1. Purchased 400 shares of its own $2 par value common stock for $ 20 per share.

2. Sold 150 shares of treasury stock purchased in (a) for $22 per share.

3. Sold 100 shares of treasury stock purchased in (a) for $20 per share.

4. Sold the remaining 150 shares of treasury stock purchased in (a) for $16 per share.

Answer 1

Journal Entries:

Date	Particulars	Debit	Credit
a)	Treasury stock-Common stock (400*20)	8,000
	Cash		8,000
	(To record the purchase of treasury stock)
b)	Bonds (150*22)	3,300
	Treasury stock		3,300
	(To record bonds purchased by issuing treasury stock)
c)	Bonds (100*20)	2,000
	Treasury stock		2,000
	(To record bonds purchased by issuing treasury stock)
d)	Bonds (150*16)	2,400
	Treasury stock		2,400
	(To record bonds purchased by issuing treasury stock)