Reference no: EM132772914

Trina E Corp. uses the par value method to account for its treasury stock transactions. The company is considering changing to the cost method and would like to evaluate the differences between the two methods and the impact that the change would have on the equity section of the company's balance sheet.

The following transactions occurred during the year:

1. At the beginning of the year, 25,000 shares of $5 par common stock were issued at $8 per share.
2. Several months later, Trina E Corp repurchased 1,500 shares at $12 per share.
3. Before the end of the fiscal year, the company re-sold 500 shares at $10 per share and then another 500 shares at $15 per share.

Required:

Problem 1: Provide the journal entries for the transactions above under the par value method. Note: Make separate journal entries for each of the two re-sell transactions.

Problem 2: Provide the journal entries for the transactions above under the cost method. Note: Make separate journal entries for each of the two re-sell transactions.