Question

(-). Zermatt AG began operations on April 1 by issuing 50,000 of no par & no stated value ordinary shares for cash at $13 per share. On April 19, it issued 2,000 ordinary shares to attorneys in settlement of their bill of $27,100 for organization costs. On April 27, Zermatt issues 1,000 of $100 par value preference shares for cash at $115 per share. I Instructions Journalize the issuance of shares, assuming the shares are not publicly traded. (). On January 1, 2020, the equity section of Bergin Stores shows share capital - ordinary (£5 par value) £1,500,000; share premium-ordinary £1,000,000; and retained earnings £1,200,000. During the year, the following treasury share transactions occurred. 1 Mar. Purchased 30,000 shares for cash at £12 per share. May 10 Sold 10,000 treasury shares for cash at £15 per share. July 30 Sold 18.000 treasury shares for cash at £10 per share. Instructions Journalize the treasury share transactions.

Answer 1

Journal Entry In the books of Jermatt AG

Date	Particulars	Debit Amount	Credit Amount
Apr 1	Bank A/c Dr.	650,000
	To Share Capital A/c		650,000
	(Being shares issued 50,000 at 13 per share)
apr 19	Bills Payable /c Dr.	26,000
	To Share Capital		26,000
	(Bills payable settled at 2000 at 13 per share for bill 27,100)
Apr 27	Bank A/c Dr.	115,000
	To Preference Share Capital		100,000
	To Securities Premium		15,000
	(Being preference share capital raised at premium of 1000 shares at par value 100, issued at 115 per share)

Journal Entry - In the books of Bergin Stores

Date	Particulars	Debit	Credit
May 1	Treasury Stock A/c Dr.	360,000
	To Cash A/c		360,000
	(Treasury Stock purchased 30,000 for 12 per share)
May 10	Cash A/c Dr.	150,000
	To Treasury Stock		120,000
	To paid-in Capital from Treasury Stock		30,000
	(Treasury Stock sold 10,000 at 15 per share, purchased at 12 per share)
May 30	Cash A/c Dr	180,000
	Paid - in - Capital from Treasury Stock A/c Dr.	36,000
	To Treasury Stock A/c		216,000
	(Treasury Stock sold 18,000 at 10 per share, purchased at 12 per share)