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10 August, 03:43

Biscayne Bay Water Inc. bottles and distributes spring water. On May 14 of the current year, Biscayne Bay Water Inc. reacquired 2,300 shares of its common stock at $49 per share. On September 6, Biscayne Bay Water Inc. sold 1,800 of the reacquired shares at $52 per share. The remaining 500 shares were sold at $46 per share on November 30. a. Journalize the transactions of May 14, September 6, and November 30. For a compound transaction, if an amount box does not require an entry, leave it blank.

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  1. 10 August, 04:02
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    May 14, 2020

    Dr. Treasury Shares $112,700

    Cr. Cash $112,700

    September 6, 2020

    Dr. Cash $93,600

    Cr. Treasury Shares $88,200

    Cr. Paid-In-Capital Treasury Stock $5,400

    November 30,

    Dr. Cash $23,000

    Dr. Paid-In-Capital Treasury Stock $1,500

    Cr. Treasury Shares $24,500

    Explanation:

    Treasury stock is the share of the company issued earlier and bought-back. It can be reissued and cancelled by the company.

    May 14

    Treasury Shares = 2,300 x $49 = $112,700

    Sale

    All the difference in the issuance of treasury stock will be transferred to Paid-In-Capital Treasury Stock account.

    September 6,

    Proceeds = 1,800 x $52 = $93,600

    Cost = 1,800 x $49 = $88,200

    Paid-In-Capital Treasury Stock = $93,600 - $88,200 = $5,400

    November 30,

    Proceeds = 500 x $46 = $23,000

    Cost = 500 x $49 = $24,500

    Paid-In-Capital Treasury Stock = $24,500 - $23,000 = $1,500
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