Question

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Treasury Stock Transactions Mystic Lake Inc. bottles and distributes spring water. On July 9 of the current year, Mystic Lake reacquired 5,000 shares of its common stock at $64 per share. On September 22, Mystic Lake sold 3,500 of the reacquired shares at $69 per share. The remaining 1,500 shares were sold at $61 per share on November 23. a. Journalize the transactions of July 9, September 22, and November 23. If an amount box does not require an entry, leave it blank. July 9 Sept. 22 Nov. 23 b. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year? c. For what reasons might Mystic Lake Inc. have purchased the treasury stock?

Answer 1

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a Ans Date Account Title Debit Credit 9- July $ 320,00 Treasury steck (5000 x 64) To Cash Al $ 320,000 22-sept $224000 Cash Al $ 241500 (3500x69) To Treasury steck (3500X64) To paid in Capital from sale of Tearoy stock $ 17500 23-roov Cash All 1500x61) $91500 paid in capital from sale of 1x 1500] Treasury $450 Stock TO Treasury steck (1500x64) $96000 Paid in Capital from sale of Treasury stock on bec-31 = - 17.500 - 4500 $ 13000 c mystic dake & increase migh have market purchased back the stock inorder price of stock com for its employees.

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