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Stella [2.4K]
3 years ago
8

During the year, the following selected transactions affecting stockholders' equity occurred for Navajo Corporation: a. Feb. 1 R

epurchased 230 shares of the company's own common stock at $27 cash per share. b. Jul. 15 Sold 130 of the shares purchased on February 1 for $28 cash per share. c. Sept. 1 Sold 100 of the shares purchased on February 1 for $26 cash per share. Required: 1. Prepare the journal entry required for each of the above transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Business
1 answer:
sattari [20]3 years ago
5 0

Answer:

a. Feb. 1

Treasury Shares $6,210 (debit)

Cash $6,210 (credit)

b. Jul. 15

Cash $3,600 (debit)

Common Shares $3,600 (credit)

c. Sept. 1

Cash $2,600 (debit)

Common Shares $2,600 (credit)

Explanation:

The purchase of company own shares is known as <em>Treasury Shares</em>.This decreases the equity element (Treasury Shares) and decreases the Assets of Cash.

Issue of Company own shares increases the Equity element (Common Shares) and decreases the Assets of Cash.

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