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Kingbird Corporation has outstanding 21,000 shares of $5 par value common stock. On August 1, 2025, Kingbird reacquired 210 shares at $87 per share. On November 1, Kingbird reissued the 160 shares at $75 per share. Kingbird had no previous treasury stock transactions. Prepare Kingbird's journal entries to record these transactions using the cost method. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Record entries in the order displayed in the problem statement.) Account Titles and Explanation Debit Treasury Stock Date 8/1/25 11/1/25 Cash Cash Retained Earnings Treasury Stock 18270 18270 6270 Credit 1827 12000

Kingbird Corporation has outstanding 21,000 shares of $5 par value common stock. On August 1, 2025, Kingbird reacquired 210 shares at $87 per share. On November 1, Kingbird reissued the 160 shares at $75 per share. Kingbird had no previous treasury stock transactions. Prepare Kingbird's journal entries to record these transactions using the cost method. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Record entries in the order displayed in the problem statement.) Account Titles and Explanation Debit Treasury Stock Date 8/1/25 11/1/25 Cash Cash Retained Earnings Treasury Stock 18270 18270 6270 Credit 1827 12000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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**Journalizing Treasury Stock Transactions for Kingbird Corporation** Kingbird Corporation has outstanding 21,000 shares of $5 par value common stock. On August 1, 2025, Kingbird reacquired 210 shares at $87 per share. On November 1, Kingbird reissued the 160 shares at $75 per share. Kingbird had no previous treasury stock transactions. ### Journal Entries #### August 1, 2025 - **Treasury Stock** (Debit): $18,270 - **Cash** (Credit): $18,270 #### November 1, 2025 - **Cash** (Debit): $12,720 - **Retained Earnings** (Debit): $6,270 - **Treasury Stock** (Credit): $18,990 ### Explanation Kingbird Corporation used the cost method to account for treasury stock transactions. Here's a breakdown of the transactions: 1. **August 1, 2025**: Kingbird purchased treasury stock, which is recorded by debiting the Treasury Stock account and crediting Cash for the total purchase cost of $18,270 (210 shares at $87 each). 2. **November 1, 2025**: Kingbird reissued 160 shares at $75 each, totaling $12,720 in cash received. This is recorded by debiting Cash. However, since the reissue is at a lower price than the purchase, Retained Earnings is also debited for $6,270 to account for the difference, and Treasury Stock is credited for the original cost of $18,990.
Transcribed Image Text:**Journalizing Treasury Stock Transactions for Kingbird Corporation** Kingbird Corporation has outstanding 21,000 shares of $5 par value common stock. On August 1, 2025, Kingbird reacquired 210 shares at $87 per share. On November 1, Kingbird reissued the 160 shares at $75 per share. Kingbird had no previous treasury stock transactions. ### Journal Entries #### August 1, 2025 - **Treasury Stock** (Debit): $18,270 - **Cash** (Credit): $18,270 #### November 1, 2025 - **Cash** (Debit): $12,720 - **Retained Earnings** (Debit): $6,270 - **Treasury Stock** (Credit): $18,990 ### Explanation Kingbird Corporation used the cost method to account for treasury stock transactions. Here's a breakdown of the transactions: 1. **August 1, 2025**: Kingbird purchased treasury stock, which is recorded by debiting the Treasury Stock account and crediting Cash for the total purchase cost of $18,270 (210 shares at $87 each). 2. **November 1, 2025**: Kingbird reissued 160 shares at $75 each, totaling $12,720 in cash received. This is recorded by debiting Cash. However, since the reissue is at a lower price than the purchase, Retained Earnings is also debited for $6,270 to account for the difference, and Treasury Stock is credited for the original cost of $18,990.
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