Treasury StockTransactions

Biscayne Bay Water Inc. bottles and distributes spring water. On May 14 of the current year, Biscayne Bay Water reacquired 23,500 shares of itscommon stockat $75 per share. On September 6, Biscayne Bay Water sold 14,000 of the reacquired shares at $81 per share. The remaining 9,500 shares were sold at $72 per share on November 30.

a.Journalize the transactions of May 14, September 6, and November 30. For a compound transaction, if an amount box does not require an entry, leave it blank.

May 14

Treasury Stock

Cash

Sept. 6

Cash

Treasury Stock

Paid-in Capital from Sale of Treasury Stock

Nov. 30

Cash

Paid-in Capital from Sale of Treasury Stock

Treasury Stock

b.What is the balance inPaid-In Capitalfrom Sale of Treasury Stock on December 31 of the current year?

$Credit

c.Where will the balance in Paid-In Capital from Sale of Treasury Stock be reported on the balance sheet?

Stockholders' Equity section

d.For what reasons might Biscayne Bay Water Inc. have purchased the treasury stock?

All of these reasons.