On January10, 2016, Talented Marketing purchased treasury stock at a cost of $21

Question

On

January10, 2016, Talented Marketing purchased treasury stock at a cost of $21 million. On

July 3,2016,Talented Marketing resold some of the treasury stock for $14 million; this resold treasury stock had costTalented Marketing $6 million.

Record the purchase and resale of

Talented Marketing'sTalented Marketing's

treasury stock. Overall, how much did stockholders' equity increase or decrease as a result of the twotreasury-stock transactions?

Record the purchase and resale of Talented Marketing's treasury stock. (Record debits first, then credits. Exclude explanations from any journal entries. Enter amounts in millions as provided to you in the problem statement.)

First, record the purchase of the treasury stock.

Journal Entry

Accounts

Debit

Credit

Millions

Jan 10

Journal Entry

Accounts

Debit

Credit

Millions

Jan 10

Explanation / Answer

Journal entry :

Date accounts & explanation debit credit Jan 10 Treasury stock a/c 21     Cash a/c 21 (To record treasury stock purchased) July 3 Cash a/c 14      Treasury stock a/c 6      Paid in capital from sale of treasury stock a/c 8 (To record resold of treasury stock)

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