Treasury Stock Transactions

Mystic Lake Inc. bottles and distributes spring water. On July 9 of the current year, Mystic Lake reacquired 5,200 shares of its common stock at $53 per share. On September 22, Mystic Lake sold 3,600 of the reacquired shares at $59 per share. The remaining 1,600 shares were sold at $50 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

Sept. 22

Nov. 23

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?