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24 January, 06:36

Sheridan Company originally issued 4800 shares of $10 par value common stock for $144000 ($30 per share). Sheridan subsequently purchases 470 shares of treasury stock for $25 per share and resells the 470 shares of treasury stock for $30 per share.

Required:

1. Journalize the two treasury stock transactions.

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Answers (1)
  1. 24 January, 08:29
    0
    Following journal entries would be recorded:

    Cash A/C Dr. $144000

    To Common Stock (4800 shares * 10) 48000

    To Paid in capital A/C (4800 shares * 20) 96000

    (Being issue of common stock recorded)

    Treasury Stock A/C (470 * 25) Dr. 11750

    To Cash A/C 11750

    (Being purchase of 470 shares recorded)

    Cash A/c (470 shares * 30) Dr 14100

    To Treasury Stock A/C (470 * 25) 11750

    To Paid in capital from treasury stock 2350

    (Being sale of treasury stock being recorded)
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