Mystic Lake Inc. bottles and distributes spring water. On July 9 of the current year, Mystic Lake reacquired 39,500 shares of its common stock

The stock outstanding when a corporation has issued only one class of stock.

at $42 per share. On September 22, Mystic Lake Inc. sold 30,100 of the reacquired shares at $51 per share. The remaining 9,400 shares were sold at $41 per share on November 23.

Required:

A.

Journalize the transactions of July 9, September 22, and November 23. Refer to the Chart of Accounts for exact wording of account titles.

B.

What is the balance in Paid-In Capital

Capital contributed to a corporation by the stockholders and others.

from Sale of Treasury Stock on December 31 of the current year?

C.

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

CHART OF ACCOUNTS

Mystic Lake Inc.

General Ledger

	ASSETS
110	Cash
120	Accounts Receivable
131	Notes Receivable
132	Interest Receivable
141	Merchandise Inventory
145	Office Supplies
151	Prepaid Insurance
181	Land
193	Equipment
194	Accumulated Depreciation-Equipment

	LIABILITIES
210	Accounts Payable
221	Notes Payable
226	Interest Payable
231	Cash Dividends Payable
236	Stock Dividends Distributable
241	Salaries Payable
261	Mortgage Note Payable

EQUITY

311

Common Stock

312

Paid-In Capital in Excess of Par-Common Stock

315

Treasury Stock

321

Preferred Stock

322

Paid-In Capital in Excess of Par-Preferred Stock

331

Paid-In Capital from Sale of Treasury Stock

340

Retained Earnings

351

Cash Dividends

352

Stock Dividends

390

Income Summary

A. Journalize the transactions of July 9, September 22, and November 23. Refer to the Chart of Accounts for exact wording of account titles.

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JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
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B. What is the balance in Paid-In Capital Capital contributed to a corporation by the stockholders and others. from Sale of Treasury Stock on December 31 of the current year?selector 1 Debit Credit Points: Feedback Check My Work Explanation C. For what reasons might Mystic Lake have purchased the treasury stock? Check all that apply. For reissuance to employees as a bonus according to stock purchase agreements. The company wishes to receive more of its own dividends. To provide shares for resale to employees. The company wishes to increase the par value of its stock. To support the market price of the stock.