Question

) The Wonderland Company issued 10,000 shares (common stock) at OMR 18 each per share. The par value of the share was OMR 12. Afterwards the company had bought back around 6000 number of shares at OMR 26 each share. These bought back shares were retired by the company later.

Closely analyse the below given situations and provide the necessary journal entries:

i) The company used par value method and made an issue of 10,000 number of shares.            

ii) The company bought back 6000 shares as per the par value method.                                  

iii) The company retired 6000 shares as per the par value method.

B) Geo LLC purchases its own 5,000 shares of OMR 100 par value common stock for OMR 270,000 cash on August 1, 2019. Until the shares are resold it is held as the treasury stock. On December 1, Geo LLC sells 2,000 shares of treasury stock at OMR 140 each per share for cash.

You are required to:

1.       Prepare necessary journal entries to address the treasury stock transactions of Geo LLC.

Answer 1