On april 2 a corporation purchased for cash 6,000 shares of its own $13 par common stock at $26 per share. it sold 4,000 of the treasury shares at $29 per share on june 10. the remaining 2000 shares were sold on november 10 for $22 per share.
a. journalize the entries to record the purchase (treasury stock is recorded at cost). apr. 2
b. journalize the entries to record the sale of the stock. if an amount box does not require an entry, leave it

Explanation:

The journal entries are shown below:

a. Treasury stock A/c Dr $156,000         (6,000 shares × $26)

          To Cash A/c  $156,000        

(Being the purchase of treasury stock is recorded)

b. Cash A/c Dr $116,000              (4,000 shares × $29)

            To Treasury Stock A/c $10,4000    (4,000 shares × $26)

            To Paid in capital - Treasury stock $12,000

(Being treasury stock is sold at higher price and the remaining amount would be credited to the paid in capital account)

c. Cash A/c Dr $44,000             (2,000 shares × $22)

Paid in capital - Treasury stock $8,000

                 To Treasury Stock A/c $52,000       (2,000 shares × $26)

(Being treasury stock is sold at lower price)

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