Question

Didavan Inc. had the following stock transactions related to its $2 par value common stock:

1. Reacquired 2,000 of own common stock at $10 per share.

2. Reissued 100 shares at $12 per share.

3. Re-issued 150 shares at $8 per share

Answer 1

1.

Account Titles and Explanation	Debit	Credit
Treasury stock (2,000*$10)	$20,000
Cash		$20,000

2.

Account Titles and Explanation	Debit	Credit
Cash (100*$12)	$1,200
Treasury stock (100*$10)		$1,000
Additional paid in capital-Treasury stock (100*$2)		$200

3.

Account Titles and Explanation	Debit	Credit
Cash (150*$8)	$1,200
Additional paid in capital-Treasury stock	$200
Retained earnings (plug)	$100
Treasury stock (150*$10)		$1,500