On January 3, Halsall Corporation purchased 1,800 shares of the company's $1 par value common stock as treasury stock, paying cash of $ 8 per share. On January 30, Halsall sold 1,200 shares of the treasury stock for cash of $9 per share. Journalize these transactions.

The journal entries alongwith its explanation are as under:

Explanation:

Journal entry at Jan 3, to record purchase of treasury stock would include the recording of treasury stock at the price paid to the shareholders for purchase of the stock, the journal entry is as under:

Dr Treasury Stock (1800 share*$8 per share) $14,400

Cr Cash $14,400

Journal entry at Jan 30, of selling treasury stock would include the elimination of the treasury stock at the amount purchased and the remainder will will be the Paid-In Capital, the journal entry is as under:

Dr Cash (1200*9) $10,800

Cr Treasury stock (1200*8) $9,600

Cr Paid in capital from sale of treasury stock $1,200