Question

Swifty Corporation acquired 18200 shares of its own common stock at $21 per share on February 5, 2020, and sold 9100 of these shares at $28 per share on August 9, 2021. The fair value of Swifty's common stock was $25 per share at December 31, 2020, and $26 per share at December 31, 2021. The cost method is used to record treasury stock transactions. What account(s) should Swifty credit in 2021 to record the sale of 9100 shares

Answer 1

the journal entry to record the purchase of treasury stocks

February 5, 2020

Dr Treasury stocks 382,200

Cr Cash 382,200

the journal entry to record the sale of 9,100 stocks

August 9, 2021

Dr Cash 254,800

Cr Treasury stock 191,100

Cr Additional paid in capital 63,700