Question

California Surf Clothing Company issues 1,000 shares of $1 par value common stock at $35 per share. Later in the year, the company decides to purchase 100 shares at a cost of $38 per share. Record the purchase of treasury stock. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

Answer:

The journal entry to record the purchase of treasury stock would be:

                           Debit ($) Credit ($)

Treasury Stock       3,800  

         Cash                   3,800

Explanation:

In order to prepare The journal entry to record the purchase of treasury stock we would have to calculate the treasury stock as follows:

Treasury Stock=shares purchased*cost per share

Treasury Stock=100 Shares x $38.00 per share

Treasury Stock=$3,800

Therefore, The journal entry to record the purchase of treasury stock would be:

                           Debit ($) Credit ($)

Treasury Stock       3,800  

         Cash                   3,800

Answer 2

The journal entry will include a debit of $3,800 to Treasury stock and Credit of $3,800 to cash.

Given Information

The company purchase 100 shares at a cost of $38 per share.

Treasury Stock = Shares purchased * Cost per share

Treasury Stock = 100 Shares * $38.00 per share

Treasury Stock = $3,800

The Journal entry will includes as below:

Date  Particulars               Debit       Credit

         Treasury Stock        $3,800        

               Cash                                   $3,800

Therefore, the journal entry will include a debit of $3,800 to Treasury stock and Credit of $3,800 to cash.

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