Question

Apollo Corporation reported the following transactions during the year [listed below]. Prepare journal entry for each of these transactions under the cost method of accounting for treasury stock.

1. Purchased 500 shares of capital stock to be held as treasury stock, paying $65 per share
2. Sold 400 of the shares of treasury stock at $69 per share
3. Sold the remaining shares of treasury stock at $49 per share

Answer 1

S. No.	Accounts	Debit	Credit
1	Treasury Stock	32,500
	Cash		32,500
	(Being purchase of treasury stock)
2	Cash	27,600
	Additional paid in capital		1,600
	Treasury Stock		26,000
	(Being sale of treasury stock @ $69 per share)
3	Cash	4,900
	Additional paid in capital	1,600
	Treasury Stock		6,500
	(Being sale of treasury stock @ $69 per share)