Treasury Stock Transactions

Yard Spray Inc. develops and produces spraying equipment for lawn maintenance and industrial uses. On January 31 of the current year, Yard Spray Inc. reacquired 16,300 shares of its common stock at $38 per share. On June 14, 10,300 of the reacquired shares were sold at $41 per share, and on November 23, 3,900 of the reacquired shares were sold at $44.

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a. Journalize the transactions of January 31, June 14, and November 23. If an amount box does not require an entry, leave it blank.

Jan. 31CashCommon StockPaid-In Capital from Sale of Treasury StockPreferred StockTreasury StockTreasury StockTreasury StockTreasury Stock CashCommon StockPaid-In Capital from Sale of Treasury StockRetained EarningsTreasury StockCashCashCashJune. 14CashCommon StockPaid-In Capital from Sale of Treasury StockRetained EarningsTreasury Stock- Select -- Select - CashCommon StockPreferred StockRetained EarningsTreasury Stock- Select -- Select - CashCommon StockPaid-In Capital from Sale of Treasury StockPreferred StockRetained Earnings- Select -- Select -Nov. 23CashCommon StockPaid-In Capital from Sale of Treasury StockRetained EarningsTreasury Stock- Select -- Select - CashCommon StockPreferred StockRetained EarningsTreasury Stock- Select -- Select - CashCommon StockPaid-In Capital from Sale of Treasury StockPreferred StockRetained Earnings- Select -- Select -

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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.

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b. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year?

Credit or Debit

c. What is the balance in Treasury Stock on December 31 of the current year?

Credit or Debit

d. How will the balance in Treasury Stock be reported on the balance sheet?

As an assetAs an addition to stockholders' equityAs common stock in the stockholders' equity sectionAs a deduction from stockholders' equityAs a liability