Question

starr corporation purchased from its stockholders 6,000 shares of its own previously issued stock for $240,000. it later resold 2,000 shares for $43 per share, than 2,000 more shares for $39 per share, and finally 2,000 shares for $37 per share. instructions: prepare journal entries for the purchase of the treasury stock and the three sales of treasury stock.

Answer 1

To prepare the journal entries for the purchase of treasury stock and the three sales of treasury stock, you need to record the transactions in the general journal.

Step-by-step explanation:

To prepare the journal entries for the purchase of treasury stock and the three sales of treasury stock, you need to record the transactions in the general journal. Here's how:

Journal Entry for Purchase of Treasury Stock:

Date: [Date of Purchase]
Debit: Treasury Stock ($240,000)
Credit: Cash ($240,000)

Journal Entries for Sales of Treasury Stock:

Date: [Date of Sale]
Debit: Cash ($[Amount received from sale])
Credit: Treasury Stock ($[Cost of shares sold])
Credit: Paid-in Capital—Treasury Stock ($[Difference between sale price and cost])

Repeat this journal entry for each sale of treasury stock, adjusting the amounts accordingly.