Recording Stock Transactions Prepare the journal entries to record the transacti

Question

Recording Stock Transactions

Prepare the journal entries to record the transactions. Use the cost method to account for the purchase of treasury stock.

For compound journal entries, if an amount box does not require an entry, leave it blank or enter "0".

April 5

May 31

Oct 1

April 5th 1st column Rows 1, 2 & 3 the choices are: Additional Paid in Capital, Cash, Common Stock, Dividends Payable, Preferred Stock, Retained Earnings, Dividends Receiveable & Treasury Stock

May 31st 1st column Rows 1 & 2 the chaices are: Additional Paid in Capital, Cash, Common Stock, Dividends Payable, Preferred Stock, Retained Earnings & Treasury Stock

Oct. 1 1st column Rows 1, 2 & 3 the choices are: Additional Paid in Capital, Cash, Common Stock, Dividends Payable, Preferred Stock, Retained Earnings, Dividends Receiveable & Treasury Stock

Coulmns 2 & 3 are Debit & Credit Respectively.

Explanation / Answer

April 5 Cash Account Dr. $180000

   To Common stock $90000

   To Additional Paid in capital $90000

   (being Common stock issued at above par value)

May31 Treasury Stock Dr. $50000

To cash $50000

(Being treasury stock purchased)

Oct.1 Cash Account Dr. $195000

To Preferred Stock $120000

To Additional paid in capital $ 75000

   (Being Preferred stock issued at above Par value)

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