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During the year, the following selected transactions affecting stockholders' equity occurred for Navajo Corporation: a. Feb. 1 Repurchased 160 shares of the company's own common stock at $25 cash per share. b. Jul. 15 Sold 90 of the shares purchased on February 1 for $26 cash per share. c. Sept. 1 Sold 60 of the shares purchased on February 1 for $24 cash per share.

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Answer:

a. Dr Treasury stock $4,000

Cr Cash $4,000

b. Dr Cash $2,340

Cr Treasury stock $2,250

Cr Additional paid-in capital $90

c. Dr Cash $1,440

Dr Additional paid-in capital $60

Cr Treasury stock $1,500

Explanation:

Preparation of the journal entries

a. Dr Treasury stock $4,000

Cr Cash $4,000

(160*$25)

b. Dr Cash $2,340

(90*$26)

Cr Treasury stock $2,250

(90*$25)

Cr Additional paid-in capital $90

($2,340-$2,250)

c. Dr Cash $1,440

(60*$24)

Dr Additional paid-in capital $60

($1,500-$1,440)

Cr Treasury stock $1,500

(60*$25)

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