In 2016, Western Transport Company entered into the treasury stock transactions

Question

In 2016, Western Transport Company entered into the treasury stock transactions described below. In 2014, Western Transport had issued 260 million shares of its $1 par common stock at $26 per share.

Prepare the appropriate journal entry for each of the following transactions: (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)

In 2016, Western Transport Company entered into the treasury stock transactions described below. In 2014, Western Transport had issued 260 million shares of its $1 par common stock at $26 per share.

Explanation / Answer

Journal entries In 2014 at issue of 260 million shares of its $1 par value common stock at $26 per share ( Rupees in million) Debit Credit Cash $6,760 Common stock : $260 260 million shares, par value of $1 Paid in capital in excess of par $6,500 On January 23, 2016, Western Transport reacquired 20 million shares at $29 per share. Debit Credit Treasury Stock: $20 20 million shares x $1 par value Paid-in Capital in excess of Par: $500 20 million shares x $25 per share Retained Earnings $60 Cash $580 On September 3, 2016, Western Transport sold 3 million treasury shares at $30 per share. Debit Credit Cash 90 Treasury Stock: 3 3 million shares x $1 per share Paid-in Capital in excess of Par: 87 3 million shares x $29 per share On November 4, 2016, Western Transport sold 3 million treasury shares at $27 per share. Debit Credit Cash 81 Treasury Stock: 3 3 million shares x $1 per share Paid-in Capital in excess of Par: 78 3 million shares x $26 per share

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