Treasury Stock Coastal Corporation issued 25,000 shares of $5 par value common s

Question

Treasury Stock

Coastal Corporation issued 25,000 shares of $5 par value common stock at $15 per share and 6,000 shares of $50 par value, eight percent preferred stock at $85 per share. Later, the company purchased 3,000 shares of its own common stock at $20 per share.

a. Prepare the journal entries to record the share issuances and the purchase of the common shares.
b. Assume that Coastal sold 2,000 shares of the treasury stock at $25 per share. Prepare the general journal entry to record the sale of this treasury stock.
c. Assume that Coastal sold the remaining 1,000 shares of treasury stock at $18 per share. Prepare the journal entry to record the sale of this treasury stock.

General Journal Ref. Description Debit Credit a. AnswerCashCommon StockPaid-in-Capital in Excess of Par Value - Common Stock8 Percent Preferred StockPaid-in-Capital in Excess of Par Value - Preferred StockTreasury Stock - CommonPaid-in-Capital from Treasury Stock. $Answer $Answer Common Stock Answer Answer AnswerCashCommon StockPaid-in-Capital in Excess of Par Value - Common Stock8 Percent Preferred StockPaid-in-Capital in Excess of Par Value - Preferred StockTreasury Stock - CommonPaid-in-Capital from Treasury Stock. Answer Answer Issued common stock.
AnswerCashCommon StockPaid-in-Capital in Excess of Par Value - Common Stock8 Percent Preferred StockPaid-in-Capital in Excess of Par Value - Preferred StockTreasury Stock - CommonPaid-in-Capital from Treasury Stock. Answer Answer 8 Percent Preferred Stock Answer Answer AnswerCashCommon StockPaid-in-Capital in Excess of Par Value - Common Stock8 Percent Preferred StockPaid-in-Capital in Excess of Par Value - Preferred StockTreasury Stock - CommonPaid-in-Capital from Treasury Stock. Answer Answer Issued preferred stock.
Treasury Stock - Common Answer Answer Cash Answer Answer Acquired common stock.
b. AnswerCashCommon StockPaid-in-Capital in Excess of Par Value - Common Stock8 Percent Preferred StockPaid-in-Capital in Excess of Par Value - Preferred StockTreasury Stock - CommonPaid-in-Capital from Treasury Stock. Answer Answer AnswerCashCommon StockPaid-in-Capital in Excess of Par Value - Common Stock8 Percent Preferred StockPaid-in-Capital in Excess of Par Value - Preferred StockTreasury Stock - CommonPaid-in-Capital from Treasury Stock. Answer Answer Paid-in-Capital from Treasury Stock. Answer Answer Sold shares of treasury stock.
c. AnswerCashCommon StockPaid-in-Capital in Excess of Par Value - Common Stock8 Percent Preferred StockPaid-in-Capital in Excess of Par Value - Preferred StockTreasury Stock - CommonPaid-in-Capital from Treasury Stock. Answer Answer Paid-in-Capital from Treasury Stock Answer Answer AnswerCashCommon StockPaid-in-Capital in Excess of Par Value - Common Stock8 Percent Preferred StockPaid-in-Capital in Excess of Par Value - Preferred StockTreasury Stock - CommonPaid-in-Capital from Treasury Stock. Answer Answer Sold shares of treasury stock.

Explanation / Answer

The following are the required journal entries:

Ref Description Debit Credit a. Cash a/c ...($15*25,000) $375,000 ........To Common stock..........($5 * 25,000) $125,000 .........To Paid in capital in excess of par value - commontock..($10 *25,000) $250,000 (issued common stock , 25,000 shares @$15, $5 being the par value) b Cash a/c...........($85 *6,000) $510,000 ............To Preferred stock a/c.....($50*6000) $300,000 ............To Paid in capital in excess of par - preferred stock a/c $210,000 (being preferred stock issued @$85 per share) Treasury stock common a/c.....(3,000 *$20) $60,000 ............To Cash a/c $60,000 (being treasury stock purchased @$20 per share, 3,000 shares) b Cash a/c ......($25 * 2,000) $50,000 . .........To Treasury stock common a/c......($20*2,000) $40,000 ...........To Paid in capital - Treasury stock ($5 * 2,000) $10,000 (being treasury stock sold for $25 each, 2,000 shares sold) c. Cash a/c.....($18*1,000) $18,000 Paid in capital treasury stock ($20- 18=>$2 per share*1,000) $2,000 .................To Treasury stock common ($20 *1,000) $20,000 (being treasury stock sold for $18, each 1,000 shares sold)

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