Question

In 2018, Western Transport Company entered into the treasury stock transactions described below. In 2016, Western Transport had issued 120 million shares of its $1 par common stock at $12 per share. Required: Prepare the appropriate journal entry for each of the following transactions: (f no entry is required for a transaction/event, select "No journal entry required" in the first account fileld. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) 1. On January 23, 2018, Western Transport reacquired 10 million shares at $15 per share 2. On September 3, 2018, We 3. On November 4, 2018 Western Transport sold 4 million treesury shares at $13 per share. stern Transport sold 4 million treasury shares at $16 per share. View transaction list Journal entry worksheet Recard the reacquisition of 10 million shares at $15 per share. Note: Enter debits before credits General Journal Jarvuary 23, 2018 Record entry Clear entry View general journal

Answer 1

Journal entry
Date	Accounts	Debit	Credit
23-Jan	Treasury stock	$   150.00
	Cash		$   150.00
	(To record purchase of treasury stock)
03-Sep	Cash	$      64.00
	Paid in capital-Treasury Stock		$        4.00
	Treasury stock		$      60.00
	(To record sale of treasury stock)
04-Nov	Cash	$      52.00
	Retained earnings	$        4.00
	Paid in capital-Treasury Stock	$        4.00
	Treasury stock		$      60.00
	(To record sale of treasury stock)

On November 4 treasury stock are sold for less than its cost. Total loss on sale of 4 million treasury shares is 8 million (4 x 2) . 4 million will be debited to paid in capital and rest amount will be adjusted by retained earnings because the loss has exceeded balance in paid in capital of treasury stock.