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Rinehart Corporation purchased from its stockholders 5,000 shares of its own previously issued stock for $255,000....

Rinehart Corporation purchased from its stockholders 5,000 shares of its own previously issued stock for $255,000. It later resold 2,000 shares for $54 per share, then 2,000 more shares for $49 per share, and finally 1,000 shares for $43 per share. Instructions Prepare journal entries for the purchase of the treasury stock and the three sales of treasury stock

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Answer #1

Purchase price of treasury stcok = $255,000 / 5,000 = $51

Treasury stock $255,000
Cash $255,000
Cash (2,000*$54) $108,000
Treasury stock (2,000*$51) $102,000
Additional paid in capital - Treasury stock $6,000
Cash (2,000*$49) $98,000
Additional paid in capital - Treasury stock $4,000
Treasury stock (2,000*$51) $102,000
Cash (1,000*$43) $43,000
Additional paid in capital - Treasury stock ($6,000-$4,000) $2,000
Retained earnings $6,000
Treasury stock (1,000*$51) $51,000
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