Question

Treasury Stock Coastal Corporation issued 25,000 shares of $6 par value common stock at $18 per share and 6,000 shares of $50 par value, eight percent preferred stock at $79 per share. Later, the company purchased 3,000 shares of its own common stock at $21 per share. a. Prepare the journal entries to record the share issuances and the purchase of the common shares. b. Assume that Coastal sold 2,000 shares of the treasury stock at $27 per share. Prepare the general journal entry to record the sale of this treasury stock. C. Assume that Coastal sold the remaining 1,000 shares of treasury stock at $20 per share. Prepare the journal entry to record the sale of this treasury stock. General Journal Description Ref. Debit Credit a. $ $ Common Stock Issued common stock. 8 Percent Preferred Stock Issued preferred stock. Acquired common stock. b. Paid-in-Capital from Treasury Stock. Sold shares of treasury stock. C. Paid-in-Capital from Treasury Stock Sold shares of treasury stock.

Answer 1

Credit Ref. a. Debit 450,000 150,000 300,000 474,000 300,000 174,000 General Journal Description Cash (25,000 * $18) Common Stock (25,000 * $6) Paid-in Capital in Excess of Par-Common Stock Issued common stock Cash (6,000 * $79) 8% Preferred Stock (6,000 * $50) Paid-in Capital in Excess of Par-Preferred Stock Issue preferred stock Treasury Stock (3,000 * $21) Cash Acquired common stock Cash (2,000 * $27) Treasury Stock (2,000 * $21) Paid-in Capital from Treasury Stock Sold shares of treasury stock Cash (1,000 * $20) Paid-in Capital from Treasury Stock Treasury Stock (1,000 * $21) Sold shares of treasury stock 63,000 63,000 b. 54,000 42,000 12,000 C. 20,000 1,000 21,000