On January 1, 2017, the stockholders' equity section of Newlin Corporation shows common stock ($7...

Question:

On January 1, 2017, the stockholders' equity section of Newlin Corporation shows common stock ($7 par value) $2,100,000; paid-in capital in excess of par $1,100,000; and retained earnings $1,170,000. During the year, the following treasury stock transactions occurred:

Mar. 1 Purchased 52,000 shares for cash at $15 per share.
July 1 Sold 10,000 treasury shares for cash at $17 per share.
Sept. 1 Sold 8,000 treasury shares for cash at $14 per share.

Journalize the treasury stock transactions.

Treasury shares journal entries

Treasury shares refer to the reacquired shares by the Company, which reduce the total number of outstanding shares. Typically, treasury shares involve three journal entries, The first entry is the reacquisition of shares. Second is the sale of the treasury shares at more than or less than cost. The last entry will then be the retirement of the reacquired shares.

Answer and Explanation:

Below are the usual journal entries for transactions involving treasury shares.

Journal Entry #AccountDebitCreditExplanation
#1Treasury Shares X Tr...

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