Liberty Corporation was authorized to issue 300,000 shares of $5 par value common stock. Liberty issued 60,000 shares of common stock on January 15, 2020, at $15 per share. Required a. Record the entry on June 30, 2020, for purchase of 6,600 common shares for the treasury at $18 per share. b. Record the entry on September 20, 2020, for sale of 2,400 treasury shares at $21 per share. c. Record the entry on November 3, 2020, for sale of 1,500 treasury shares at $17 per share.

Liberty Corporation

Journal Entries:

January 15, 2020:

Debit Cash $900,000

Credit Common stock $300,000

Credit Additional Paid-in Capital $600,000

To record the issue of 60,000 shares of common stock at $15 per share.

a) June 30, 2020:

Debit Treasury Stock $33,000

Debit Additional Paid-in Capital $85,800

Credit Cash $118,800

To record the purchase of 6,600 treasury shares at $18 per share.

b) September 20, 2020:

Debit Cash $50,400

Credit Treasury Stock $12,000

Credit Additional Paid-in Capital $38,400

To record the sale of 2,400 treasury shares at $21 per share.

c) November 3, 2020:

Debit Cash $25,500

Credit Treasury Stock $7,500

Credit Additional Paid-in Capital $18,000

To record the sale of 1,500 treasury shares at $17 per share.

Explanation:

a) Data and Analysis:

Authorized common stock share capital of 300,000 at $5 = $1,500,000

January 15, 2020: Issued 60,000 shares at $15 per share:

Cash $900,000 Common stock $300,000 Additional Paid-in Capital $600,000

June 30, 2020: Purchased 6,600 for the treasury shares at $18 per share:

Treasury Stock $33,000 Additional Paid-in Capital $85,800 Cash $118,800

September 20, 2020: Sale of 2,400 treasury shares at $21 per share:

Cash $50,400 Treasury Stock $12,000 Additional Paid-in Capital $38,400

November 3, 2020: Sale of 1,500 treasury shares at $17 per share:

Cash $25,500 Treasury Stock $7,500 Additional Paid-in Capital $18,000

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