Question

Hansen Inc. engaged in the following transactions during the current year: Repurchased 13,000 shares of its own $1 par common stock for $14 per share on January 14. Sold 2,000 treasury shares to employees for $6 per share on January 31. Repurchased 3,000 more shares of the $1 par common stock for $16 per share on July 24. Sold the remaining 11,000 shares from the January 14 purchase and 1,200 of the shares from the July 24 purchase to employees for $6.50 per share on August 1. Required: 1. Prepare journal entries for each of these transactions. a. Jan. 14 Treasury Stock Cash (Record purchase of treasury shares) b. Jan. 31 Cash Additional Paid-In Capital-Treasury Stock Treasury Stock (Record reissue of treasury shares) c. July 24 Treasury Stock Cash (Record purchase of treasury shares) d. Aug. 1 Cash Additional Paid-In Capital-Treasury Stock Treasury Stock (Record reissue of treasury shares) Feedback 1. When purchasing its own previously issued stock, corporations record a reduction to stockholders' equity for the purchase amount of the treasury stock. 2. Conceptual Connection: Determine what the effect on total stockholders' equity is for each of the four transactions. Note the following: Enter the net increase or decrease by transaction. Enter all amounts as positive values. a. Decreased by $ b. Increased by c. Decreased by d. Increased by Total Decreased by $

Answer 1