California Surf Clothing Company issues 1,000 shares of $1 par value common stock at $32 per share. Later in the year, the company decides to repurchase 100 shares at a cost of $35 per share. Record the transaction if California Surf reissues the 100 shares of treasury stock at $37 per share. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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Juliet Cordova

Business

6 November, 20:10

California Surf Clothing Company issues 1,000 shares of $1 par value common stock at $32 per share. Later in the year, the company decides to repurchase 100 shares at a cost of $35 per share. Record the transaction if California Surf reissues the 100 shares of treasury stock at $37 per share. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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Trixie · Answer 1

The journal entry is shown below:

Cash A/c Dr $3,700

To Treasury Stock A/c $3,500

To Additional Paid in Capital A/c $200

(Being the reissued shares are recorded)

The computation is shown below:

For cash account:

= 100 shares * $37 per share

= $3,700

For Treasury Stock Account

= 100 shares * $35 per share

= $3,500

And, for Additional Paid in Capital Account

= $3,700 - $3,500

= $200

For reissued shares, we debited the cash account and credited the treasury stock and Additional Paid-in Capital account