Respuesta :
Answer:
Journal Entry
1 Feb Debit Treasury Stock $36,720 Credit Bank $36,720
1 Mar Debit Bank $28,000 Debit Capital paid in excess-common stock $3,500 Credit Treasury stock $31,500
18 Mar Debit Bank $240,500 Debit Capital paid in excess-common stock $92,500 Credit Treasury stock $333,000
22 April Debit Bank $428,450 Credit Additional capital paid in excess - treasury stock $22,550 Credit Treasury stock $405,900
Explanation:
When using the cost method treasury stock is recorded at the cost of repurchase meaning it does not take into account the Par value and all the excess capital paid.
1 Feb Treasury stock = 2,040*$18 = $36,720
If Treasury stock is reissued for less than its cost then Bank increases with what is received treasury stock decreases by its original cost and the difference is set off against capital paid in excess-Treasury stock and if there is no previous capital paid in excess for treasury stock it is set off against capital paid in excess- common stock then retained earnings if capital paid in excess- common stock is also not available
Answer:
1 Feb DEBIT CREDIT
Treasury stock $36720
cash $36720
1 Mar
Cash $28000
Paid in Capital Access $3500
Treasury Stock $31500
1 Mar
Cash $ 240 500
Paid in Capital Access $92 500
Treasury stock $333000
1 Apr
Cash $ 428450
Paid in Capital Access $22 550
Treasury Stock $405900
Explanation:
If the shares from treasury stock are reissued at a price that is higher than their cost, the difference is credited to additional paid-in capital If the shares from treasury stock are reissued at a price that is lower than their cost, the difference is debited to additional paid-in capital. lso at the issue of treasury we record that price and not the par value
