Treasury Stock, Cost Method
Response to the following problem:
On January 1, the Sanders Corporation had 1,000 shares of $10 par common stock authorized and outstanding. These shares were originally issued at a price of $26 per share. In addition, 500 shares of $50 par preferred stock were outstanding. These were issued at a price of $75 per share. During the year the following stock transactions occurred:
1. March 3: Sanders Corporation reacquired 100 shares of its own common stock at a cost of $24 per share.
2. April 27: It sold 25 shares of the stock acquired on March 3 for $30 per share.
3. July 10: It sold 25 shares of the stock acquired on March 3 for $22 per share.
4. October 12: It retired the remaining shares acquired on March 3.
Required:
Prepare journal entries to record the treasury stock transactions of Sanders Corporation assuming it uses the cost method.