Problem:
Bargain Central Furniture, Inc., completed the following treasury stock transactions:
Purchased 1,300 shares of the comapnys $1 par common stock, as a treasury stock, paying $6 par per share.
Sold 700 shares of the treasury stocks for cash $9 per share.
Required:
Question 1: Journalize these transactions. Explanations are not required.
Question 2: Show how Bargain Central will report treasury stock on its December 31, 2010 balance sheet after completing the two transactions. In reporting the treasury stock, report only on the Treasury Stock account. You may ignore all other accounts.
Note: Please provide through step by step calculations.