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nikdorinn [45]
3 years ago
12

Elroy Corporation repurchased 4,000 shares of its own stock for $30 per share. The stock has a par of $10 per share. A month lat

er, Elroy resold 900 shares of the treasury stock for $32 per share. Required: a. Record the two events in general journal format. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Business
1 answer:
Firdavs [7]3 years ago
7 0

Answer:

Here, selling price is $32 and the cost of treasury stock is $30, Hence selling price is higher than cost.

Following Journal Entries are to be passed:

(a) Treasury Stock (4,000 shares × $30) A/c   Dr.   $120,000

To Cash A/c                                                                               $120,000

(b) Cash (900 Shares × Selling Price $32) A/c   Dr.  $28,800

To Treasury Stock (900 shares × Cost 30)                               $27,000

To  Paid in Capital from Treasury Stock (Difference)                $1,800

 

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June 1 2020

No entry

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Dr Cash $1,980

Dr Accounts receivable $300

Cr Sales revenue $1,730

Cr Unearned sales revenue $550

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Cr Inventory $1,140

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Dr Unearned service revenue $550

Cr Accounts receivable $300

Cr Service Revenue $550

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Cr Unearned sales revenue $550 ($630/$2,610*$2,280)

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