Question

Sheffield Inc. has outstanding 13,100 shares of $10 par value common stock. On July 1, 2017, Sheffield reacquired 113 shares at $88 per share. On September 1, Sheffield reissued 62 shares at $94 per share. On November 1, Sheffield reissued 51 shares at $86 per share.
Prepare Sheffield's journal entries to record these transactions using the cost method.

Answer 1

Answer:

The journal entries for the given economic events are given below:

Date         Account Title                         Debit     Credit

7/1/17      Treasury Stock (113 X $88)     9,944

                 Cash                                                       9,944

9/1/17       Cash (62 X $94)                     5,828

                 Treasury Stock (60 X $88)                   5,280

                  Paid-in Capital from

                  Treasury Stock                                      548

(Paid in capital from Treasury Stock = 5828 - 5280 = 548)

11/1/17 Cash (51 X $86)                           4,386

                Paid-in Capital from

                Treasury Stock                          102

                     Treasury Stock (51 X $88)                   4,488

(Paid in capital from Treasury Stock = 4488 - 4386 = 548)