Question

Sunny Corporation purchased 500 shares of its own stock at $10 per share on January 1, 20XX. On April 15^th, the company sold 100 shares at $11 per share. On June 20^th the company sold another 100 shares at $8 per share. Record the journal entries required. (24 points)

The following table shows the equity section at the beginning of the year.

Common Stock – No state value                                                            $1,000,000

Additional Paid In Capital – Common Stock                                           5,000,000

Retained earnings                                                                                  25,000,000

Answer 1

Journal

Date	Account title	Debit	Credit
Jan. 1	Treasury stock	5,000
	Cash		5,000
April 15	Cash	1,100
	Treasury stock		1,000
	Paid in capital from treasury stock		100
June 20	Cash	800
	Paid in capital from treasury stock	100
	Retained earnings	100
	Treasury stock		1,000

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