Dennison Service Corporation had no treasury stock at the beginning of 2009. During January 2009, Dennison purchased
Question:
Dennison Service Corporation had no treasury stock at the beginning of 2009. During January 2009, Dennison purchased 7,600 shares of treasury stock at $21 per share. In April 2009, Dennison sold 4,100 of the treasury shares for $25 per share. In August 2009, Dennison sold the remaining treasury shares for $20 per share.
Required:
Prepare journal entries for the January, April, and August treasury stock transactions.
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Step by Step Answer:
January Treasury Stock 7600 shares 21 159600 Cash 159600 April Cash 102500 Treasury Sto...View the full answer
Cornerstones of Financial and Managerial Accounting
ISBN: 978-0324787351
1st Edition
Authors: Rich Jones, Mowen, Hansen, Heitger
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Treasury stock refers to shares of a company\'s own stock that the company has bought back from its shareholders and now holds as a form of asset on its balance sheet. When a company buys back its own stock, it reduces the number of outstanding shares in the market, which can potentially increase the value of the remaining shares. Treasury stock can be acquired through a variety of methods, such as open market purchases, negotiated transactions, or as a result of converting convertible securities. Companies may buy back their own shares for a number of reasons, including to return capital to shareholders, to signal confidence in the company\'s future, or to use the shares for employee stock option plans. While treasury stock does not pay dividends, it can be reissued by the company at a later time, which could dilute the value of the remaining shares. Companies are required to report their treasury stock holdings in their financial statements.
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