Exercise 11-7 Rinehart Corporation purchased from its stockholders 5,900 shares
ID: 2513872 • Letter: E
Question
Exercise 11-7
Rinehart Corporation purchased from its stockholders 5,900 shares of its own previously issued stock for $289,100. It later resold 1,600 shares for $52 per share, then 1,600 more shares for $47 per share, and finally 2,700 shares for $41 per share.
Prepare journal entries for the purchase of the treasury stock and the three sales of treasury stock. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Account Titles and Explanation
Debit
Credit
(To record purchase from stockholders.)
(To record sales of shares at $52 per share.)
(To record sales of shares at $47 per share.)
(To record sale of shares at $41 per share.)
Account Titles and Explanation
Debit
Credit
(To record purchase from stockholders.)
(To record sales of shares at $52 per share.)
(To record sales of shares at $47 per share.)
(To record sale of shares at $41 per share.)
Explanation / Answer
Date
Particular
Debit
Credit
1
Treasury Stock Dr
$ 2,89,100.00
Allowance for doubtful debt Cr
$ 2,89,100.00
(Purchase of treasury stock)
2
Cash
$ 83,200.00
Treasury Stock Dr
$ 78,400.00
Paid -in capital from treasury stock
$ 4,800.00
(Sale of share) (1600*52)
3
Cash
$ 75,200.00
Paid in capital from treasury stock
$ 3,200.00
Treasury stock Cr
$ 78,400.00
(sale of treasury stock at 47 a share)
Retained Earnings
20,000
Paid-in Capital from Treasury Stock
1,600
Cash
110,700
Treasury Stock
132,300
Date
Particular
Debit
Credit
1
Treasury Stock Dr
$ 2,89,100.00
Allowance for doubtful debt Cr
$ 2,89,100.00
(Purchase of treasury stock)
2
Cash
$ 83,200.00
Treasury Stock Dr
$ 78,400.00
Paid -in capital from treasury stock
$ 4,800.00
(Sale of share) (1600*52)
3
Cash
$ 75,200.00
Paid in capital from treasury stock
$ 3,200.00
Treasury stock Cr
$ 78,400.00
(sale of treasury stock at 47 a share)
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