ch15(1) - Prepare the journal entry to record the...

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Name: __________________________ Problem chapter 15 1. Treasury stock. In 2009, Pennington Co. issued 120,000 of its 500,000 authorized shares of $15 par value common stock at $28 per share. In January, 2010, Pennington repurchased 25,000 shares at $20 per share. Assume these are the only stock transactions the company has ever had. Instructions (a) Prepare the journal entry to record the purchase of treasury stock by the cost method. (b) 18,000 shares of treasury stock are reissued at $21 per share. Prepare the journal entry to record the reissuance by the cost method. (c) 5,000 shares of treasury stock are reissued at $12 per share.
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Unformatted text preview: Prepare the journal entry to record the reissuance by the cost method. (d) The remaining 2,000 shares are retired. Prepare the journal entry to record the retirement. (a) Treasury stock 500,000 = 25000 * 20 Cash 500,000 (b) Cash 378,000 = 18000 * 21 Treasury stock 360,000 = 18000 * 20 Paid-in capital from treasury stock 18,000 = 18000 * 1 (c) Cash 60,000 = 5000 * 12 Paid-in capital from treasury stock 18,000 = 5000 * 3.6 Retained Earnings 22,000 = 5000 * 4.4 Treasury Stock 100,000 = 5000 * 20 (d) Common stock 30,000 = 2000 * 15 Excess of par 10,000 Treasury stock 40,000 = 2000 * 20 Page 1...
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