Question

Arantxa corporation has outstanding 20,000 shares of $5 par value common stock. on august 1, 2014, arantxa reacquired 200 shares at $80 per share.

Answer 1

The journal entry for the shares reacquisition on August 1, 2014, of Arantxa Corporation is as follows:

Journal Entry:

August 1, 2014:

Debit Treasury Stock $1,000

Debit Additional Paid-in Capital - Common Stock $15,000

Credit Cash $16,000

• To record the re-acquisition of shares at $80 per share.

Transaction Analysis:

August 1, 2014:

Treasury Stock $1,000 Additional Paid-in Capital - Common Stock $15,000 Cash $16,000 ($80 x 200)

Question Completion:

Show the journal entries for the given information above.

Thus, the journal entry above shows that the shares were reacquired at a premium of $75 ($80 - $5) per share.

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Answer 2

The journal entries to record these transactions of Arantxa corporation using the cost method are given below.

How do you define journal entries?

The journal entry can encompass numerous recordings, every of that's both a debit or a credit. The act of maintaining or making statistics of any transactions both financial or non-financial is referred to as journal entries.

The missing information in the question can be given below:

On November 1, Arantxa reissued the 200 shares at $70 per share. Arantxa had no previous treasury stock transactions. Prepare Arantxa's journal entries to record these transactions using the cost method.

As per the given information,

The journal entries for the given information are as follows:

Treasury A/c   Dr.  $16,000

          To Cash                   $16,000

Cash                       $14000

Retained Earnings $2,000

       To Treasury stock                      $16,000

Hence, the journal entries recording the given transaction relating to treasury stock are explained above.

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