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Sprinkle Inc. has outstanding 10,000 shares of $10 par value common stock. On July 1, 2020, Sprinkle reacquired 100 shares at $87 per share. On September 1, Sprinkle reissued 60 shares at $90 per share. On November 1, Sprinkle reissued 40 shares at $83 per share.
Prepare Sprinkle's journal entries to record these transactions using the cost method.

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anthougo

The preparation of Sprinkle Inc.'s journal entries to record the above transactions under the cost method are as follows:

July 1, 2020:

Debit Treasury Stock $8,700

Credit Cash $8,700

To record the re-acquisition of 100 shares at $87 per share.

September 1, 2020:

Debit Cash $5,400

Credit Treasury Stock $5,400

  • To record the re-issuance of 600 treasury stock shares at $90 per share

November  1, 2020:

Debit Cash $3,320

Credit Treasury Stock $3,320

  • To record the re-issuance of 400 treasury stock shares at $83 per share.

Data Analysis:

10,000 shares Outstanding at $10 par

July 1, 2020: Treasury Stock $8,700 Cash $8,700

September 1, 2020: Cash $5,400 Treasury Stock $5,400

November  1, 2020: Cash $3,320 Treasury Stock $3,320

Thus, under the cost method, there is no separation of the difference between cost and par value of shares between the Additional Paid-in Capital and the Treasury Stock accounts.

Learn more: brainly.com/question/17177730

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