Exercise 11-7 Rinehart Corporation purchased from its stockholders 5,000 shares
ID: 2534552 • Letter: E
Question
Exercise 11-7 Rinehart Corporation purchased from its stockholders 5,000 shares of its own previously issued stock for $255 00·li, later resold 2 000 shares o r SS then 2,000 more shares for $49 per share, and finally 1,000 shares for $43 per share r 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 O for the amounts.) Account Titles and Explanation @htndlik (To record purchase from stockholders.) (To record sales of shares at $54 per share.) To record sales of shares at $49 per share.) To record sale of shares at $43 per share.)Explanation / Answer
Answer:
Event
Account title and explanation
Debit $
Credit $
1
Treasury Stock
255,000
Cash
255,000
(to record the purchase of treasury
stock for 255,000)
2
Cash (2000*54)
108000
Treasury Stock (2000*51)
102000
Additional paid in capital
6000
(to record the issue of 2000 shares at 54)
3
Cash (2000*49)
98000
Additional paid in capital(2000*2)
4000
Treasury Stock (2000*51)
102000
(to record the issue of 2000 shares at 49)
4
Cash (1000*43)
43000
Additional paid in capital(1000*2)
2000
Retained earnings(balancing)
6000
Treasury Stock (1000*51)
51000
(to record the issue of 1000 shares at 43)
Event
Account title and explanation
Debit $
Credit $
1
Treasury Stock
255,000
Cash
255,000
(to record the purchase of treasury
stock for 255,000)
2
Cash (2000*54)
108000
Treasury Stock (2000*51)
102000
Additional paid in capital
6000
(to record the issue of 2000 shares at 54)
3
Cash (2000*49)
98000
Additional paid in capital(2000*2)
4000
Treasury Stock (2000*51)
102000
(to record the issue of 2000 shares at 49)
4
Cash (1000*43)
43000
Additional paid in capital(1000*2)
2000
Retained earnings(balancing)
6000
Treasury Stock (1000*51)
51000
(to record the issue of 1000 shares at 43)
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