Question

In 2021, Western Transport Company entered into the treasury stock transactions described below. In 2019, Western Transport had issued 280 million shares of its $1 par common stock at $28 per share.

Required:
Prepare the appropriate journal entry for each of the following transactions: (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)

1. On January 23, 2021, Western Transport reacquired 20 million shares at $31 per share.
2. On September 3, 2021, Western Transport sold 2 million treasury shares at $32 per share.
3. On November 4, 2021, Western Transport sold 2 million treasury shares at $29 per share.

Answer 1

Credit Date 1 General journal Jan. 23,2021 Treasury Stock Cash Debit $ 620 $ 620 $ 64 Sep. 3.2021 Cash Treasury Stock Paid-in capital—Share repurchase $ $ 62 2 58 Nov.4.2021 Cash Paid-in capital—Share repurchase Retained earnings Treasury Stock $ $ $ 2. $ 62 Working Notes: Jan. 23,2021 Treasury Stock = 20*$31 = $620 Sep. 3,2021 Cash = 2*$32 = $64 Treasury Stock = 2*$31 = $62 Paid-in capital—Share repurchase = 2*($32-$31) = $2 Cash = 2*$29= $58 Retained earnings = 562-558-S2 = $2 Treasury Stock = 2*$31 = 562