Chapter 13 Homework Treasury Stock Transactions Lava Lake Inc. bottles and distributes spring water. On February 11 of the current year, Lava Lake reacquired 6,000 shares of its common stock at $84 per share. On April 30, Lava Lake Inc. sold 4,200 of the reacquired shares at $93 per share. On August 22, Lava Lake Inc. sold 1,800 shares at $80 per share. a. Journalize the transactions of February 11, April 30, and August 22. For a compound transaction, if an amount box does not require an entry, leave it blank. Apr 30 Cash Paid-In Capital from Sale of Treasure Shack Aug. 22 Sash Paid-In Capital from Sale of Treasure Stack- Feedback The repurchase of shares, known as treasury stock, is typically recorded using the cost method. When the treasury stock is resold, what is the company receiving? What is it giving up? Keep in mind the price paid to buy the treasury stock and the price the shares are resold for at a later date. b. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year? Credit c. For what reasons might Lava Lake have purchased the treasury stock? All of these reasons. Feedback Consider what entries might have affected the value of the paid-in capital account. Review why companies may repurchase their stock. Feedback