Question

Treasury Stock Transactions Biscayne Bay Water Inc. bottles and distributes spring water. On May 14 of the current year, Biscayne Bay Water Inc. reacquired 2,300 shares of its common stock at $51 per share. On September 6, Biscayne Bay Water Inc. sold 1,700 of the reacquired shares at $55 per share. The remaining 600 shares were sold at $48 per share on November 30. Journalize the transactions of May 14, September 6, and November 30. For a compound transaction, if an amount box does not require an entry, leave it blank.

Answer 1

Step-by-step explanation:

The journal entries are shown below:

On May 14

Treasury Stock A/c Dr $117,300 (2,300 shares × $51)

To Cash A/c $117,300

(Being the required shares for $51 is recorded)

On September 6

Cash A/c Dr $93,500 (1,700 shares × $55)

To Treasury Stock A/c $86,700 (1,700 shares × $51)

To Paid in capital - Treasury stock $6,800

(Being treasury stock is sold at higher price and the remaining amount would be credited to the paid in capital account)

On November 30

Cash A/c Dr $28,800 (600 shares × $48)

Paid in capital - Treasury stock $1,800

To Treasury Stock A/c $30,600 (600 shares × $51)

(Being treasury stock is sold at lower price and the remaining amount would be debited to the paid in capital account)