- Common & Preferred Stock Transactions Part #11 (subsection-B) Common stock tra

Question

- Common & Preferred Stock Transactions

Part #11 (subsection-B) Common stock transactions

a.) prepare the appropriate journal entry to account for Capture Corporation issuance of 2,750,000 shares of $1.50 par value common stock. The issue price was $20.25 per share.

b.)      One Year after Capture Corporations issuance, the companies common stocks are trading at $5 a share on the open market. Based on the volatile market conditions Capture Corporations board of directors authorized the reacquisition of 2,000,000 shares of common stock. These shares were purchased back at $6.50 per share. Prepare the appropriate journal entry to account for this transaction.[Be careful - take your time].

c.)      Subsequent to transaction "b.)" above, the stock trading price increased to $18.50 per share. Given the positive market activity the Board of Directors authorize 1,500,000 of the treasury shares recently acquired by Capture Corporation to be re-sold back into the open market. [Be careful - take your time].

Explanation / Answer

Cash $ 55,687,500.00 Common Stock $1.50 par $    4,125,000.00 Additional Paid in Capital $ 51,562,500.00 Treasury Stock $ 13,000,000.00 Cash $ 13,000,000.00 Cash $ 27,750,000.00 Additional Paid in Capital $ 18,000,000.00 Treasury Stock $    9,750,000.00

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