Record the purchase of treasury stock by the cost method

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Reference no: EM131202608

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Treasury stock.

In 2014, Pennington Co. issued 300,000 of its 1,000,000 authorized shares of $10 par value common stock at $22 per share. In January 2015, Pennington repurchased 20,000 shares at $26 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) 9,000 shares of treasury stock are reissued at $27 per share. Prepare the journal entry to record the reissuance by the cost method.

(c) 7,000 shares of treasury stock are reissued at $23 per share. Prepare the journal entry to record the reissuance by the cost method.

(d) The remaining treasury shares are retired. Prepare the journal entry to record the retirement.

Reference no: EM131202608

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