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23 February, 15:28

On February 1, 2018, Cue Company acquired 1,000 shares of its $1 par value stock for $47 per share and held these shares in treasury. On April 10, 2019, Cue resold all the treasury shares for $50 per share. Which of the following entries would be recorded when Cue Company resells the shares of treasury stock

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  1. 23 February, 15:44
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    The journal entries to record both transactions should be:

    February 1, 2018, repurchase of 1,000 stocks at $47

    Dr Treasury stocks 47,000

    Cr Cash 47,000

    April 10, 2019, treasury stocks were sold at $50

    Dr Cash 50,000

    Cr Treasury stocks 47,000

    Cr Additional paid in capital 3,000

    Treasury stocks account is a contra equity account with a debit balance that reduces the value of total stockholders' equity.
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