Create he journal entry to record the purchase of treasury

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Reference no: EM13126764

In 2010, Mordica Co. issued 200,000 of its 500,000 authorized shares of $10 par value common stock at $35 per share. In January, 2011, Mordica repurchased 15,000 shares at $30 per share. Assume these are the only stock transactions the company has ever had.

Instructions:

(a) Prepare the journal entry to record the purchase of treasury stock by the cost method.

(b) 5,000 shares of treasury stock are reissued at $33 per share. Prepare the journal entry to record the reissuance by the cost method.

Reference no: EM13126764

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