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On April 2 a corporation purchased for cash 5,000 shares of its own $11 par common stock at $28 per share. It sold 3,000 of the treasury shares at $31 per share on June 10. The remaining 2000 shares were sold on November 10 for $24 per share. a. Journalize the entries to record the purchase (treasury stock is recorded at cost). Apr. 2 b. Journalize the entries to record the sale of the stock. If an amount box does not require an entry, leave it blank. Jun. 10 Nov. 10

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Answer:

April 2

Treasury Stock $140,000 (debit)

Cash $140,000 (credit)

June 10

Cash $93,000 (debit)

Treasury Stock $93,000  (credit)

Nov 10

Cash $48,000 (debit)

Treasury Stock $48,000  (credit)

Explanation:

When the Company purchases its own shares

De-recognize the equity item : Treasury Stock and also de-recognize the assets of Cash.

When the Company sales its own shares.

Recognize the Equity item : Treasury Stock and also recognize the asset Cash.

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