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Flint Corporation purchased from its stockholders 5,200 shares of its own previously issued stock for $254,800. It later resold 1,825 shares for $52 per share, then 1,825 more shares for $47 per share, and finally 1,550 shares for $41 per share.Prepare journal entries for the purchase of the treasury stock and the three sales of treasury stock

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Answer:

The journal entries are as follows:

(i) Cash A/c(1,825 × $52) Dr. $94,900

      To Treasury stock(1,825 × $49)            $89,425                      

      To paid in capital from Treasury stock(1,825 × $3)  $5,475

(To record the purchase at $52)

(ii) Cash A/c(1,825 × $47) Dr. $85,775

    paid in capital from Treasury stock(1,825 × $2) A/c Dr.  $3,650

              To Treasury stock(1,825 × $49)    $89,425

(To record the purchase at $47)

(iii) Cash A/c(1,550 × $41) Dr. $63,550

    paid in capital from Treasury stock A/c Dr. $1,825

    Retained earnings A/c (1,550 × $8) Dr. $10,575  

                   To Treasury stock(1,550 × $49)    $75,950

(To record the purchase at $41)                      

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