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Journal entries for treasury stock transactions. Prepare journal entries under the cost method to record the following

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Journal entries for treasury stock transactions. Prepare journal entries under the cost method to record the following treasury stock transactions of Melissa Corporation.

a. Purchases 10,000 shares of its own $5 par value common stock for $12 per share.

b. Issues 6,000 treasury shares upon the conversion of bonds with a carrying value of $72.000. Melissa Corporation records bond conversions using the carrying value method.

c Purchases 20,000 shares of its own $5 par value common stock for $15 per share.

d. Issues 24,000 treasury shares and 6,000 newly issued shares of common stock in the acquisition of land with a market value of $540,000.


Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...
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Financial Accounting an introduction to concepts, methods and uses

Financial Accounting an introduction to concepts, methods and uses

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Treasury stock refers to shares of a company\'s own stock that the company has bought back from its shareholders and now holds as a form of asset on its balance sheet. When a company buys back its own stock, it reduces the number of outstanding shares in the market, which can potentially increase the value of the remaining shares. Treasury stock can be acquired through a variety of methods, such as open market purchases, negotiated transactions, or as a result of converting convertible securities. Companies may buy back their own shares for a number of reasons, including to return capital to shareholders, to signal confidence in the company\'s future, or to use the shares for employee stock option plans. While treasury stock does not pay dividends, it can be reissued by the company at a later time, which could dilute the value of the remaining shares. Companies are required to report their treasury stock holdings in their financial statements.

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