On January 1, 20xx, Swenson Corporation had 40,000 shares of $10 par value commo

Question

On January 1, 20xx, Swenson Corporation had 40,000 shares of $10 par value common stock issued and outstanding. All 40,000 shares had been issued in a prior period at $20.00 per share. On February 1, 20xx, Swenson purchased 2,000 shares of treasury stock for $24 per share and later sold the treasury shares for $21 per share on March 1, 20xx. The journal entry to record the SALE of the treasury shares on MARCH 1, 20xx, would include a Debit to Cash for $48,000 Credit to Treasury Stock of $48,000 Credit to Treasury Stock of $42,000 Debit to Cash of $42,000

Explanation / Answer

since treasury stocks were repurchase at $21 only so 2000 @21 = 42,000 hence entry will ne

DR Cash   $42,000

CR To Treasury stock $42,000

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