Question

Record the journal entries for the following transactions. (A) Michael Company issues 25,000 shares of its...

Record the journal entries for the following transactions. (A) Michael Company issues 25,000 shares of its $6 par common stock for $15 per share. (B) Michael Company purchases back 15,000 shares of it's common stock for $5 per share. (C) Michael Company resells 5,000 of it's treasury shares for $12 per share.

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Answer #1
Account title Debit credit
a)
Cash/Bank (25000 * $15) $      375,000
Common Stock (25000*$6) $ 150,000
Additional Paid in Capital, Common Stock $ 225,000
(To record the issue of Common stock)
b)
Treasury stock (15000*$5) $         75,000
Cash/Bank $    75,000
(To record the buy back of shares)
c)
Cash (5000*$12) $         60,000
Treasury stock (5000*$5) $    25,000
Additional Paid in Capital, Treasury stock $    35,000
(To record the sale of Treasury stock above cost)
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