Question

EllaJane Corporation was organized several years ago and was authorized to issue 4,000,000 shares of $50 par value 4% preferred stock. It is also authorized to issue 1,750,000 shares of $1 par value common stock. In its fifth year, the corporation has the following transactions: Mar. 1 Purchased 2,500 shares of its own common stock at $14 per share.

Apr. 10 Reissued 1,250 shares of its common stock held in the treasury for $18 per share.
Jun. 12 Reissued 1,250 shares of common stock at $12 per share.
Journalize the transactions.

Answer 1

Ellajane Corporation - Journal Entries

Date Particulars Debit Credit

1-Mar Treasury Stock $35,000

To Cash $35,000

(Being 2500 shares of treasury stock purchased at $14 per share)

10-Apr Cash A/c (1250*$18) $22,500

To Treasury Stock (1250*14) $17,500

To Additional Paid in Capital $5,000

(Being 1250 shares of treasury stock sold at $18 per share)

12-Jun Cash A/c (1250*12) $15,000

Additional Paid in Capital A/c $2,500

To Treasury Stock (1250*14) $17,500

(Being 1250 shares of treasury stock sold at $12 per share)