Angler Corporation's balance sheet reported the following: Capital stock outstanding, 5,000 shares, par $30 per share $150,000 Paid-in capital in excess of par 80,000 Retained earnings 100,000 The following transactions occurred this year: (a) Purchased 400 shares of capital stock to be held as treasury stock, paying $60 per share. (b) Sold 300 of the shares of treasury stock at $65 per share. (c) Sold the remaining shares of treasury stock at $50 per share. What is the journal entry for transaction (a) ?

Question

Hope Spears

Business

1 December, 17:32

Angler Corporation's balance sheet reported the following: Capital stock outstanding, 5,000 shares, par $30 per share $150,000 Paid-in capital in excess of par 80,000 Retained earnings 100,000 The following transactions occurred this year: (a) Purchased 400 shares of capital stock to be held as treasury stock, paying $60 per share. (b) Sold 300 of the shares of treasury stock at $65 per share. (c) Sold the remaining shares of treasury stock at $50 per share. What is the journal entry for transaction (a) ?

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Kline · Answer 1

Treasury stock A/c Dr $24,000

To Cash A/c $24,000

Explanation:

(a). According to the scenario, the computation for the given data are as follows:

Purchased stock = 400 shares

Paid per share = $60

So, Total purchased cost = 400 * $60

= $24,000

So, the journal entry for the given data are as follows:

Treasury stock A/c Dr $24,000

To Cash A/c $24,000

(Being the purchase of treasury stock recorded)