Question

In 2018, Southwestern Corporation completed the treasury stock transactions listed below.

February		2:		Reacquired 65,000 shares at $11.50.
March		17:		Sold 15,000 treasury shares at $13.75.
May		17:		Sold 20,000 treasury shares at $7.75.

Southwestern had issued 100,000 shares of its $1 par common stock for $10 several months ago.

Required:
Prepare the journal entries to record the above transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer 1

Journal entry

Date particular Debit Credit 2/02 treasory stock(65,000*11.50$) .Dr. $7,47,500 To Cash $7,47,500 17/03 Cash (15,000*$13.75). Dr $2,06,250 To treasury stock(15,000*$11.50) $1,72,500 To Paid-in capital - share repurchase $33,750 17/05 Cash (20,000*$7.75). Dr $1,55,000 To Paid-in capital - share repurchase. Dr $33,750 Retained earnings(to balance ) Dr $41,250

To treasury stock(20,000*$11.50)

$2,30,000

Note- entries are prepared using cost method.