Answer:
The first transaction is that 10 million shares are being reacquired at 32.50 per share so we need to find out how much cash is spent to buy these shares.
32.5*10 million = $325 million
We will debit treasury stock and credit cash because the company is buying shares from the market and paying cash
The second transaction is reacquiring 10 million shares at 36 per share so we need to find how much cash is spent
10 million *36= $360 million
We will debit treasury stock and credit cash because the company is buying shares from the market and paying cash
In the third transaction 1 million shares are being sold for 42, so need to figure out how much cash the company gets from the transaction
42* 1 million = 42 million
We will debit cash and credit common stock as the company is issuing shares to the market and getting cash for it
In the fourth transaction 1 million shares are being sold for 36, so need to figure out how much cash the company gets from the transaction
36* 1 million = 36 million
We will debit cash and credit common stock as the company is issuing shares to the market and getting cash for it
Journal entries
Debit Credit
Treasury stock 325 million
Cash 325 million
Treasury stock 360 million
Cash 360 million
Cash 42 million
Common stock 42 million
Cash 36 million
Common stock 36 million
Explanation:
