Prepare journal entries for the following transactions (use the cost method for
ID: 2406255 • Letter: P
Question
Prepare journal entries for the following transactions (use the cost method for re-issuance):
1. On 1/1/2016, company EXO issued 20,000 common shares, each having a par value of $1 at $10 per share.
2. On 7/1/2016, EXO repurchased 5,000 shares of common stock at $8 per share.
3. On 10/1/2016, EXO re-issued 1,000 shares of the treasury stock repurchased on 7/1 for $10 per share.
4. On 11/1/2016, EXO re-issued another 2,000 shares of the treasury stock repurchased on 7/1 for $7.5 per share. 5. On 12/1/2016, EXO re-issued another 1,000 shares of the treasury stock repurchased on 7/1 for $7 per share.
Explanation / Answer
Journal Entries (Amounts in $)
No. Date Account Titles and Explanation Debit Credit 1 1/1/16 Cash (20,000 shares*$10) 200,000 Common Stock (20,000 shares*$1 par) 20,000 Paid-in Capital in excess of par value-Common Stock (200,000-20,000) 180,000 2 7/1/16 Treasury Stock (5,000 shares*$8 per share) 40,000 Cash 40,000 3 10/1/16 Cash (1,000 shares*$10) 10,000 Treasury Stock (1,000 shares*$8 cost) 8,000 Additional paid-in capital-Treasury Stock (10,000-8,000) 2,000 4 11/1/16 Cash (2,000 shares*$7.50) 15,000 Additional paid-in capital-Treasury Stock (Bal. fig) (16,000-15,000) 1,000 Treasury Stock (2,000 shares*$8 cost) 16,000 5 12/1/16 Cash (1,000 shares*$7) 7,000 Additional paid-in capital-Treasury Stock (8,000-7,000) 1,000 Treasury Stock (1,000 shares*$8 cost) 8,000