Question

Holanna Company reported the following balances related to common stock as of December 31, 2014

Common stock $1 par, 200,000 shares issued and outstanding ..... Paid-in capital in excess of par ...... $ 200,000 ......... 2,400,000

The company purchased and immediately retired 180,000 shares at $19 on August 1, 2015, and 32,000 shares at $9 on December 31, 2015. Make the entries to record the acquisition and retirement of the common stock. (Assume all shares were originally sold at the same price.)

Answer 1

Answer
Date	Explanation	Debit	Credit
08/01/2015	common stock a/c [18000*1]	$        18,000
	To cash		$        18,000
	( To record common stock purchased )
	Cash	$      342,000
08/01/2015	To common stock		$        18,000
	To paid in excess of par value [18000*18]		$      324,000
	( To record common stock issued at $19 per share)
31/12/2015	common stock	$        32,000
	To cash		$        32,000
	( To record common stock purchased)
31/12/2015	Cash	$      288,000
	To common stock		$        32,000
	To paid in excess of par value [32000*8]		$      256,000
	( To record common stock issued at $9 per share)