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10 May, 05:37

On July 1, Raney Corporation purchases 690 shares of its $4 par value common stock for the treasury at a cash price of $9 per share. On September 1, it sells 440 shares of the treasury stock for cash at $11 per share. Journalize the two treasury stock transactions. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

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  1. 10 May, 06:05
    0
    Date Particular Dr. Cr.

    Jul-1 Treasury stock $6,210

    Cash $6,210

    Sep-1 Cash $4,840

    Treasury stock $3,960

    Paid-in capital - Treasury stock $880

    Explanation:

    Treasury stocks are the company's own shares which is repurchased by the company. It is recorded in treasury shares account which is an contra equity account. I can be reissued or cancelled by the company.

    Purchase of Treasury Stock

    Treasury Stock = 690 x $9 = $6,210

    Sales of Treasury Stock

    Cash Receipt = 440 x $11 = $3,300

    Treasury Stock = 440 x $9 = $3,960

    Paid-in capital - Treasury stock = 440 x $2 = $880
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