Mystic Lake Inc. bottles and distributes spring water. On July 9 of the current year, Mystic Lake

Question:

Mystic Lake Inc. bottles and distributes spring water. On July 9 of the current year, Mystic Lake reacquired 60,000 shares of its common stock at $42 per share. On September 22, Mystic Lake sold 45,000 of the reacquired shares at $51 per share. The remaining 15,000 shares were sold at $40 per share on November 23.
a. Journalize the transactions of July 9, September 22, and November 23.
b. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year?

c. For what reasons might Mystic Lake Inc. have purchased the treasury stock?

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...

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