Question

Treasury Stock Coastal Corporation issued 25,000 shares of $8 par value common stock at $20 per share and 6,000 shares of $53 par value, eight percent preferred stock at $61 per share. Later, the company purchased 3,000 shares of its own common stock at $23 per share. a. Prepare the journal entries to record the share issuances and the purchase of the common shares. b. Assume that Coastal sold 2,000 shares of the treasury stock at $29 per share. Prepare the general journal entry to record the sale of this treasury stock. C. Assume that Coastal sold the remaining 1,000 shares of treasury stock at $21 per share. Prepare the journal entry to record the sale of this treasury stock. General Journal Ref. Description Debit Credit Common Stock Issued common stock. 8 Percent Preferred Stock Issued preferred stock. Acquired common stock. Paid-in-Capital from Treasury Stock. Sold shares of treasury stock. Paid-in-Capital from Treasury Stock Sold shares of treasury stock.

Answer 1

Ref.	Description	Debit	Credit
a.	Cash                                                                                            [25,000 shares x $20]	$500,000
	Common Stock                                                                         [25,000 shares x $8]		$200,000
	Paid-in capital in excess of par value - Common stock            [25,000 shares x ($20 - $8)]		$300,000
	(Issued shares of common stock)
	Cash                                                                                            [6,000 shares x $61]	$366,000
	10% Preferred stock                                                                 [6,000 shares x $53]		$318,000
	Paid-in capital in excess of par value - Preferred stock           [6,000 shares x ($61 - $53)]		$48,000
	(Issued shares of preferred stock)
	Treasury stock	$69,000
	Cash                                [3,000 shares x $23]		$69,000
	(Acquired shares of common stock)
b.	Cash                                                         [2,000 shares x $29]	$58,000
	Treasury stock                                      [Cost = 2,000 shares x $23]		$46,000
	Paid in capital from treasury stock       [Gain = 2,000 shares x ($29 - $23)]		$12,000
	(Sold shares of treasury stock)
c.	Cash                                                         [1,000 shares x $21]	$21,000
	Paid in capital from treasury stock           [Loss = 1,000 shares x ($23 - $21)]	$2,000
	Treasury stock                                        [Cost = 1,000 shares x $23]		$23,000
	(Sold shares of treasury stock)