Q26E Journalizing issuance of stock a... [FREE SOLUTION]

Chapter 13: Q26E (page 713)

Journalizing issuance of stock and treasury stock transactions
Stock transactions for Careful Driving School, Inc. follow:
Mar. 4 Issued 27,000 shares of $1 par value common stock at $10 per share.
May 22 Purchased 1,300 shares of treasury stock鈥攃ommon at $13 per share.
Sep. 22 Sold 500 shares of treasury stock鈥攃ommon at $23 per share.
Oct. 14 Sold 800 shares of treasury stock鈥攃ommon at $9 per share.

Expert verified

Cash is debited with $270,000; Common stock$27,000 and Paid- in capital in excess of par$243,000 is credited.

Treasury stockis debited; Cashis credited with $16,900

Cash is debited $11,500; Treasury stock$6,500 and Paid- in capital in excess of par$5,000 is credited.

Cash$7,200 and Paid- in capital in excess of par$3,200 is debited; Treasury stock$10,400 is credited.

Workings:

Common stock (27,000* $1)

Paid- in capital in excess of par ($270,000- $27,000)

Treasury stock (1,300* $13)

Treasury stock (500* $13)

Paid- in capital in excess of par ($500* $10)

Paid- in capital in excess of par ($800* $4)

Treasury stock (800* $9)

Date	Transaction	Debit	Credit
Mar.4	Cash	$270,000
	Common stock		$27,000
	Paid- in capital in excess of par		$243,000
	To record issue of common stock
May 22	Treasury stock	$16,900
	Cash		$16,900
	To record purchase of treasury stock
Sep 22	Cash	$11,500
	Treasury stock		$6,500
	Paid- in capital in excess of par		$5,000
	To record sell of treasury stock
Oct 14	Cash	$7,200
	Paid- in capital in excess of par	$3,200
	Treasury stock		$10,400
	To record sell of treasury stock

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