1. Accounting for Treasury Stock

   On January 1, 2019, Tommyboy Corporation repurchases 11,300 shares of its outstanding common stock for $26 per share. On May 1, 2019, Tommyboy sells 9,500 shares of treasury stock for $17 per share. On October 1, 2019, Tommyboy sells 1,500 shares of its treasury stock for $44 per share.

   Required:

   1. Prepare the journal entries to record these transactions.

   2019 Jan. 1	(Accounts Payable, Additional Paid-In Capital-Treasury Stock, Cash, Retained Earnings, Treasury Stock)
   	(Accounts Payable, Additional Paid-In Capital-Treasury Stock, Cash, Retained Earnings, Treasury Stock)
   	(Record purchase of treasury shares)
   May 1	(Accounts Payable, Additional Paid-In Capital- Common Stock,Cash, Common Stock, Treasury Stock)
   	(Accounts Receivable, Additional Paid-In Capital- Preferred Stock, Preferred Stock, Retained Earnings, Treasury Stock)
   	(Accounts Payable, Additional Paid-In Capital-Common Stock, Cash, Retained Earnings, Treasury Stock)
   	(Record reissue of treasury shares)
   Oct. 1	(Accounts Receivable, Additional Paid-In Capital-Treasury Stock, Cash, Retained Earnings, Treasury Stock)
   	(Accounts Receivable, Additional Paid-In Capital-Common Stock, Additional Paid-In Capital-Treasury Stock, Cash, Preferred Stock)
   	(Accounts Receivable, Cash, Common Stock, Dividends Payable,Treasury Stock)
   	(Record reissue of treasury shares)

   2. How will these transactions affect Tommyboy's 2019 income statement?

   The income statement is (affected, not affected) by treasury stock transactions because the income statement (includes business and owners transactions, is reserved for transactions with nonowners.)