Question

E11-15 (Algo) Recording and Analyzing Treasury Stock Transactions LO11-3 During the year the following selected transactions affecting stockholders' equity occurred for Orlando Corporation: a. Apr. 1 Repurchased 230 shares of the company's own common stock at $37 cash per share. b. Jun. 14 Sold 90 of the shares purchased on April 1 for $42 cash per share. c. Sept. 1 Sold 80 of the shares purchased on April 1 for $32 cash per share. Required: 1. Prepare journal entries for each of the above transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer 1

Ans.
Transaction	Date	General Journal	Debit	Credit
a	1-Apr	Treasury stock	$8,510
		Cash   (230 * $37)		$8,510
		(To record the repurchase of own stock)
b	14-Jun	Cash   (90 * $42)	$3,780
		Treasury stock   (90 * $37)		$3,330
		Additional paid in capital		$450
		(To record treasury shares sold)
	Additional paid in capital   =    $3,780 - $3,330 =   $450
c	1-Sep	Cash   (80 * $32)	$2,560
		Additional paid in capital	$400
		Treasury stock   (80 * $37)		$2,960
		(To record treasury shares sold)
	Additional paid in capital   =    $2,960 - $2,560 =   $400
	*Price per share of treasury stock will remain same because shares are sold from
	purchase on April 1.