Question

On January 1, 2015, the stockholders’ equity section of Martin Corporation shows: common stock ($5 par...

  1. On January 1, 2015, the stockholders’ equity section of Martin Corporation shows: common stock ($5 par value) $2,000,000; paid-in capital in excess of par value $1,200,000; and retained earnings $1,400,000. During the year, the following treasury stock transactions occurred.

Mar. 1    Purchased 60,000 shares for cash at $18 per share.

July 1      Sold 15,000 treasury shares for cash at $19 per share.

Sept. 1    Sold 10,000 treasury shares for cash at $17 per share.

Instructions:

  1. Journalize the treasury stock transactions.

Homework Answers

Answer #1

--Requirement [a] Journal entries required

Date Accounts title Debit Credit
01-Mar Treasury Stock (60000 shares x $18) $1,080,000
   Cash $1,080,000
(to record repurhcase)
01-Jul Cash (15000 shares x $ 19) $285,000
   Treasury Stock (15000 shares x $ 18) $270,000
   Paid in Capital from Treasury Stock $15,000
(to record re issuance)
01-Sep Cash (10000 shares x $ 17) $170,000
Paid in Capital from Treasury Stock $10,000
   Treasury Stock (10000 shares x $ 18) $180,000
(to record re issuance)
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