Question

Treasury Stock Inland Corporation issued 30,000 shares of $5 par value common stock at $15 per share and 8,000 shares of $50 par value, eight percent preferred stock at $85 per share. Later, the company purchased 3,000 shares of its own common stock at $20 per share. X X 0x X X a. Prepare the journal entries to record the share issuances and the purchase of the common shares. b. Assume that Inland sold 2,000 shares of the treasury stock at $30 per share. Prepare the general journal entry to record the sale of this treasury stock. C. Assume that Inland sold the remaining 1,000 shares of treasury stock at $18 per share. Prepare the journal entry to record the sale of this treasury stock. General Journal Ref. Description Debit Credit a. Cash Common Stock Paid-in-Capital in Excess of Par Value - Common Stock Issued common stock. Cash 8 Percent Preferred Stock Paid-in-Capital in Excess of Par Value - Preferred Stock Issued preferred stock. Treasury Stock - Common 0 x Cash Acquired common stock. b. Cash Treasury Stock - Common Paid-in-Capital from Treasury Stock. Sold shares of treasury stock. Cash Paid-in-Capital from Treasury Stock OX Treasury Stock - Common 0 Sold shares of treasury stock. < x x x

Answer 1

Ref	Description	Debit	Credit
a.	Cash [30,000*15]	450,000
	Common Stock [30,000*5]		150,000
	Paid in capital in excess of par value - common stock [30,000*10]		300,000
	Cash [8000*85]	680,000
	8 Percent preferred stock [8000*50]		400,000
	Paid in capital in excess of par value - preferred stock [8000*35]		280,000
	Treasury stock - Common	60,000
	Cash [3000*20]		60,000
b	Cash [2000*30]	60,000
	Treasury stock - Common [2000*20]		40,000
	Paid in capital from Treasury Stock [2000*10]		20,000
c	Cash [1000*18]	18,000
	Paid in capital from Treasury Stock [1000*2]	2,000
	Treasury stock - Common [1000*20]		20,000