*Exercise 135 In 2017, Mordica Co. issued 310,000 of its 500,000 authorized shar

Question

*Exercise 135 In 2017, Mordica Co. issued 310,000 of its 500,000 authorized shares of $10 par value common stock at $35 per share. In January, 2018, Mordica repurchased 22,000 shares at $29 per share. Assume these are the only stock transactions the company has ever had. Prepare the journal entry to record the purchase of treasury stock by the cost method. (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 Debit Credit 10,000 shares of treasury stock are reissued at $31 per share. Prepare the journal entry to record the reissuance by the cost method. (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 Credit

Explanation / Answer

the following are the required journal entries:

1.

2. 10,000 shares reissued at $31 per share.

Account titles and explanation Debit Credit Treasury stock a/c $638,000 ..........To Cash a/c $638,000 (being repurchase of treasury stock 22,000 shares @$29 per share)

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