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(Please see BOLD entries)
Dinah Soars, Biff Wellington and Duane Pipe are the stockholders of Sharpe Incorporated. The charter of the corporation authorized 500,000 shares of $5 par common stock, and 100,000 shares of $30 par, 3%, preferred stock. As of January 1, 2018, there were 25,000 shares of common stock issued and outstanding and 4,000 shares of preferred stock issued and outstanding.
Jan 1 Issued 13,000 shares of $5 par common stock at $19, receiving cash.
Jan 1 Issued 6,700 shares of $30 par, 3%, preferred stock at $69 for cash.
Feb 1 Purchased equipment for $220,000, paying $20,000 cash and financing the remainder with a 180-day, 5% note payable.
Mar 15 Purchased land for $352,000 by issuing 18,000 shares of common stock.
Mar 31 Purchased a two-year insurance policy for $39,000.
May 1 Purchased 1,600 shares of the company’s own common stock at $23 per share.
May 31 Issued $1,000,000 of 8-year, 7% bonds with interest payable semiannually. The amount of cash received was $1,087,936.
July 30 Paid the amount due on the note payable signed on February 1.
Aug 1 Sold 500 shares of treasury common stock purchased on May 1 for $26 per share
My answer:
Dr. Cash 13,000
Cr. Treasury Stock 11,500
Cr. Paid in Capital-Treasury Stock 1,500
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