Problem
Mystic Lake Inc. bottles and distributes spring water. On July 9 of the current year, Mystic Lake reacquired 43,800 shares of its common stock at $43 per share. On September 22, Mystic Lake Inc. sold 28,400 of the reacquired shares at $50 per share. The remaining 15,400 shares were sold at $42 per share on November 23.
Required:
A. Journalize the transactions of July 9, September 22, and November 23. Refer to the Chart of Accounts for exact wording of account titles.
B. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year?
C. For what reasons might Mystic Lake have purchased the treasury stock?