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Stock Issuances and Repurchase    Larkin Company began operations on January 1, 2019. Larkin is authorized...

Stock Issuances and Repurchase

   Larkin Company began operations on January 1, 2019. Larkin is authorized to issue 500,000 shares of $10 par value common stock. The following transactions occurred during 2019 and 2020.

       1/1/19   Issued 300,000 shares of common stock for $50 per share.
       6/1/20   Purchased 5,000 shares of treasury stock for $55 per share.
8/1/20   Resold 1,000 shares of the treasury stock for $50 per share.
9/1/20 Resold 2,000 shares of the treasury stock for $56 per share.

   Instructions:   Record the 2019 and 2020 stock transactions for Larkin.

Business   Accounting   
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Answer #1

Journal entries

Date General Journal Debit Credit
1/1/19 Cash (300000*50) 15000000
Common Stock 3000000
Paid in capital in excess of par-Common 12000000
6/1/20 Treasury Stock (5000*55) 275000
Cash 275000
8/1/20 Cash (1000*50) 50000
Retained earnings 5000
Treasury Stock 55000
9/1/20 Cash (2000*56) 112000
Treasury Stock 100000
Paid in capital from sale of treasury Stock 12000
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