Underwood Company's only treasury stock transactions for the current year follow: (1) 2,000 shares of its common stock were purchased on June 1 for $80,000; (2) On July 1 it reissued 500 of these shares at $45 per share; (3) On August 1 it reissued an additional 500 treasury shares at $38 per share. 1) Prepare the journal entries required to record these transactions.2) Calculate the balance in Paid-in Capital, Treasury Stock, on September 1 assuming its beginning-year balance is zero.
What will be an ideal response?
| 1) Jun 1 | Treasury Stock, Common …………………… | 80,000 | ? |
| ? | Cash ………………………………………… | ? | 80,000 |
| ? | ? | ? | ? |
| July 1 | Cash (500 * $45) ……………………………… | 22,500 | ? |
| ? | Treasury Stock, Common (500 * $40) ……… | ? | 20,000 |
| ? | Paid-in Capital, Treasury Stock …………… | ? | 2,500 |
| ? | ? | ? | ? |
| August 1 | Cash (500 * $38) ……………………………… | 19,000 | ? |
| ? | Paid-in Capital, Treasury Stock ……………… | 1,000 | ? |
| ? | Treasury Stock, Common (500 * $40) ……… | ? | 20,000 |
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