Treasury Stock Transactions Mystic Lake Inc. bottles and distributes spring water. On July 9 of the current year, Mystic Lake reacquired 3,900 shares of its common stock at $55 per share. On September 22, Mystic Lake sold 2,700 of the reacquired shares at $61 per share. The remaining 1,200 shares were sold at $53 per share on November 23. a. Journalize the transactions of July 9, September 22, and November 23. If an amount box does not require an entry, leave it blank. July 9 Treasury StockY 214,500 Cash 214,500 Sept. 22 Cash 164,700 Treasury Stock Paid-In Capital from Sale of Treasury Stock Nov. 23 Cash 23 Cash Y 63,600 0 Paid-In Capital from Sale of Treasury Stock Treasury Stock 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 Mystic Lake Inc. have purchased the treasury stock? Feedback Check My Work Consider what entries might have affected the value of the paid-in capital account. Review why companies may repurchase their stock. Learning Objective 5. Treasury Stock Traisactions SprayCo Inc. develops and produces spraying equipment for lawn maintenance and industrial uses. On March 9 of the current year, SprayCo reacquired 15,900 shares of its common stock at $28 per share. On June 9 10,000 of the reacquired shares were sold at $31 per share, and on November 13, 3,800 of the reacquired shares were sold at $32 a. Journalize the transactions of March 9, June 9, and November 13. If an amount box does not require arn entry, leave it blank. Mar.9 Treasury Stock 45,200 Cash 45,200 June 9 Cash 310,000 Treasury Stock Paid-In Capital from Sale of Treasury Stock 30,000 Nov. 13 Cash 121,600 Treasury Stock Paid-In Capital from Sale of Treasury Stock 15,200 Feedback Check My Work 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? 45,200 Credit c. What is the balance in Treasury Stock on December 31 of the current year? Debit d. How will the balance in Treasury Stock be reported on the balance sheet? As a deduction from stockholders' equity Feedback Check My Work Consider what entries might have affected the value of the Treasury Stock account Review the presentation of stockholder's equity and treasury stock on the balance sheet. Learning Objective 5, Learning Objective 6