Question

Novak Corporation purchased from its stockholders S. finally 1.950 shares for $40 per here O shares of its own previously s t ock for 1283,200. erre 1.975 were 51 , 1.975 shares 146 per here, and Prepare journal entries for the purchase of the treasury stock and the three sales of treasury wack Cred countles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit (To record purchase from stockholders) (to record les of shares 6 perhre)

Answer 1

Journal entries :- Accounts Title & Explanation Debit $ Credit $ Date Treasury stock 283,200 To Cash 283,200 (Entry for purchase of own stock at $ 48 each share) Cash (1975*51) 100,725 To Treasury stock (1975*48) 94,800 To Additional paid-in-capital (treasury stock) (1975*3) 5,925 (Entry for reissue of treasury stock) Cash (1975*46) 90,850 Additional paid-in-capital (treasury stock) 3,950 (1975*2) To Treasury stock (1975*48) 94,800 (Entry for reissue of treasury stock) Cash (1950*40) 78,000 Additional paid-in-capital (treasury stock) 1,975 Retained earnings 13,625 To Treasury stock (1950*48) 93,600 (Entry for reissue of treasury stock) In the last entry at $ 40 issue, additional paid in capital balance got utilised in full and balance will be debited to retained earnings.