Heavenly Inc. bottles and distributes spring water. It has outstanding 50,000 shares of \($10\) par common stock that were issued at par. On July 1 of the current year. Heavenly Inc. reacquired 3,000 shares of its common stock at \($40\) per share.

On August 10, Heavenly Inc. sold 1,500 of the reacquired shares at \($43\) per share.

The remaining 1,500 shares were sold at \($39\) per share on December 19.

a. Determine the amount at which the July 1 transaction should be recorded.

b. What is the amount of the paid-in capital on December 31 of the current year?

c. For what reasons might Heavenly Inc. have purchased the treasury stock?