Question

On January 31, Wilderness Resorts Inc. reacquired 22,500 shares of its common stock at $31 per share. On April 20, Wilderness Resorts sold 12,800 of the reacquired shares at $40 per share. On October 4, Wilderness Resorts sold the remaining shares at $28 per share. Journalize the transactions of January 31, April 20, and October 4.

Answer 1

Step-by-step explanation:

The journal entries are shown below:

1. Treasury shares A/c Dr $697,500 (22,500 shares × $31 per share)

To Cash A/c $697,500

(Being treasury shares are purchased for cash)

2. Cash A/c Dr $512,000 (12,800 shares × $40 per share)

To Treasury shares A/c $396,800 (12,800 shares × $31 per share)

To Additional paid in capital A/c $115,200 (12,800 shares × $31 per share)

(Being the shares are sold)

3. Cash A/c Dr $271,600 (9,700 shares × $28 per share)

Additional paid in capital A/c Dr $29,100 (9,700 shares × $3 per share)

To Treasury shares A/c $300,700 (9,700 shares × $31 per share)

(Being the remaining shares sold is recorded)

The remaining shares would be

= 22,500 shares - 12,800 shares

= 9,700 shares