Treasury Stock
Coastal Corporation issued 25,000 shares of $5 par value common stock at $15 per share and 6,000 shares of $50 par value, eight percent preferred stock at $85 per share. Later, the company purchased 3,000 shares of its own common stock at $20 per share.
a. Prepare the journal entries to record the share issuances and the purchase of the common shares.
b. Assume that Coastal sold 2,000 shares of the treasury stock at $25 per share. Prepare the general journal entry to record the sale of this treasury stock.
c. Assume that Coastal sold the remaining 1,000 shares of treasury stock at $18 per share. Prepare the journal entry to record the sale of this treasury stock.
| General Journal | |||
| Ref | Description | Debit $ | Credit $ |
| A | Cash | 375000 | |
| Common Stock | 125000 | ||
| Paid in Capital In excess of par-common stock |
250000 | ||
| Cash | 510000 | ||
| 8% preffered Stock | 300000 | ||
| Paid in Capital In excess of par-common stock |
210000 | ||
| Common stock | 15000 | ||
| Paid in Capital In excess of par-common stock |
30000 | ||
| Retained Earning | 15000 | ||
| Cash | 60000 | ||
| B | Tresury Stock | 50000 | |
| Cash | 50000 | ||
| (2000*25) | |||
| C | Cash | 18000 | |
| Additional paid in capital-Tresury Stock |
2000 | ||
| Tresury Stock | 20000 | ||
