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Record Chiron Company's treasury stock transactions listed below using the cost method [prepare journal entries]: Purchased...

Record Chiron Company's treasury stock transactions listed below using the cost method [prepare journal entries]:

  1. Purchased 700 shares of common stock to be held as treasury stock, paying $52 per share
  2. Sold 260 of the shares of treasury stock at $48 per share
  3. Sold 120 shares of treasury stock at $58 per share
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Answer #1
sno Particulars Debit Credit
1 Treasury stock 36,400
............To cash 36,400
($52*700=>$36,400)
2 Cash 12,480
discount on capital   1,040
.........To Treasury stock 13,520
(cash = 48*260=>12480, treasury stock =260*48=>12,480, discount on capital = 13520-12480=>1040)
3 cash 6,960
............To Treasury stock 6,240
...........To additional paid in capital 720
(cash = 120*58=>6960, treasury stock =120*52=>6240, additional paid in capital = 6960-6240=>720)
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