Question

Agler Corporation's balance sheet reported the following: Capital stock outstanding, 6,000 shares, par $30 per share $180,000 Paid-in capital in excess of par 83,100 Retained earnings 108,900 The following transactions occurred this year:

(a) Purchased 180 shares of capital stock to be held as treasury stock, paying $61 per share.

(b) Sold 160 of the shares of treasury stock at $67 per share.

(c) Sold the remaining shares of treasury stock at $48 per share.

Prepare the journal entry for these transactions under the cost method of accounting for treasury stock. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Answer 1

Journal entry :

No.	accounts & explanation	debit	credit
a	Treasury stock (180*61)	10980
	Cash		10980
	(To record treasury stock purchased)
b	Cash (160*67)	10720
	Treasury stock (160*61)		9760
	Paid in capital from sale of treasury stock		960
	(To record sale of treasury stock)
c	Cash (20*48)	960
	Paid in capital from sale of treasury stock	260
	Treasury stock (20*61)		1220
	(To record sale of treasury stock)