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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.

Respuesta :

Answer:

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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