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19 September, 03:14

Prepare journal entries to record the following transactions for Sherman Systems.

a. Purchased 5,000 shares of its own common stock at $25 per share on October 11.

b. Sold 1,000 treasury shares on November 1 for $31 cash per share.

c. Sold all remaining treasury shares on November 25 for $20 cash per share.

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  1. 19 September, 07:06
    0
    The journal entries required for the redemption as well as the two instances of stock sale is given in details below:

    Explanation:

    DR CR

    11-Oct Treasury stock 5000shares @$5 each 25000

    Cash 25000

    Being own shares repurchased

    1-Nov Cash 31000

    Treasury stock 1000 shares issued @$31 each 25000

    Paid-in-capital treasury stock 6000

    Reissuing treasury stock a higher price

    25-Nov Cash 80000

    Paid-in-capital treasury stock 6000

    Retained earnings 14000

    Treasury stock 100000

    Reissuing treasury stock at a lower price
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