Question

Ivanhoe Company had the following stockholders' equity as of January 1, 2025: Common stock, $1 par value, 126,000 shares issued $126,000 Paid-in capital in excess of par-common stock 800,000 Retained earnings 418,000 Total stockholders' equity $1,344,000 During 2025, the following transactions occurred: Feb. 16 Ivanhoe repurchased 5,200 shares of treasury stock at a price of $15 per share. Mar. 8 100 shares of treasury stock repurchased above were reissued at $16 per share. Apr. 11 800 shares of treasury stock repurchased above were reissued at $12 per share. May 8 2,200 shares of treasury stock repurchased above were reissued at $18 per share. (a) Prepare the journal entries to record the treasury stock transactions in 2025, assuming Ivanhoe uses the cost method. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. List all debit entries before credit entries. Record journal entries in the order presented in the problem.)

Answer 1

To record the treasury stock transactions, journal entries are made depending on the date and transaction. On Feb. 16, Ivanhoe repurchased 5,200 shares of treasury stock for $15 each. On Mar. 8, 100 shares were reissued at $16 per share. On Apr. 11, 800 shares were reissued at $12 per share. On May 8, 2,200 shares were reissued at $18 per share.

Step-by-step explanation:

To record the treasury stock transactions in 2025, assuming Ivanhoe uses the cost method, the following journal entries should be made:

Feb. 16:

• Debit: Treasury Stock ($15 x 5,200) = $78,000
• Credit: Cash ($15 x 5,200) = $78,000

Mar. 8:

• Debit: Cash ($16 x 100) = $1,600
• Credit: Treasury Stock ($15 x 100) = $1,500
• Credit: Paid-in Capital in Excess of Par-Common Stock ($16 - $15) x 100 = $100

Apr. 11:

• Debit: Cash ($12 x 800) = $9,600
• Credit: Treasury Stock ($15 x 800) = $12,000
• Credit: Paid-in Capital in Excess of Par-Common Stock ($15 - $12) x 800 = $2,400

May 8:

• Debit: Cash ($18 x 2,200) = $39,600
• Credit: Treasury Stock ($15 x 2,200) = $33,000
• Credit: Paid-in Capital in Excess of Par-Common Stock ($18 - $15) x 2,200 = $6,600