Question

Brief Exercise 15-08 Riverbed Inc. has outstanding 15,000 shares of $10 par value common stock. On July 1, 2020, Riverbed reacquired 108 shares at $87 per share. On September 1, Riverbed reissued 63 shares at $91 per share. On November 1, Riverbed reissued 45 shares at $84 per share. Prepare Riverbed’s journal entries to record these transactions using the cost method. (Credit account titles are automatically indented when 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.) Date Account Titles and Explanation Debit Credit choose a transaction date enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount choose a transaction date enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount 11/1/20 enter an account title to record the transaction on November 1, 2020 enter a debit amount enter a credit amount enter an account title to record the transaction on November 1, 2020 enter a debit amount enter a credit amount enter an account title to record the transaction on November 1, 2020

Answer 1

Answer:

The journal entries to record the share transactions are shown in the attached  spreadsheet.

Explanation:

On the 1st of July when 108 shares were reacquired, the cash outflow from the transaction is $9396  which was credited cash account and debited to treasury stock as a reduction in shares.

Upon the issue of 63 shares on September 1,the cash inflow was $5733  and the amount is comprises of $5481 belonging to treasury and the balance of $252 in paid-in capital in excess of par account.

Lastly, the last issue for $84 was lower than par value of $87,hence the difference was made up from balance in paid-in capital in excess of par.

Find attached for more details.

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