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 $72 per share. On April 30, Lava Lake Inc. sold 4,200 of the reacquired shares at $78 per share. On August 22, Lava Lake Inc. sold 1,800 shares at $68 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.

Feb. 11
Apr. 30
Aug. 22

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 Lava Lake have purchased the treasury stock?