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During the year, the following selected transactions affecting stockholders' equity occurred for Navajo Corporation: a. Feb. 1 Repurchased 230 shares of the company's own common stock at $27 cash per share. b. Jul. 15 Sold 130 of the shares purchased on February 1 for $28 cash per share. c. Sept. 1 Sold 100 of the shares purchased on February 1 for $26 cash per share. Required: 1. Prepare the journal entry required for each of the above transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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Answer:

a. Feb. 1

Treasury Shares $6,210 (debit)

Cash $6,210 (credit)

b. Jul. 15

Cash $3,600 (debit)

Common Shares $3,600 (credit)

c. Sept. 1

Cash $2,600 (debit)

Common Shares $2,600 (credit)

Explanation:

The purchase of company own shares is known as Treasury Shares.This decreases the equity element (Treasury Shares) and decreases the Assets of Cash.

Issue of Company own shares increases the Equity element (Common Shares) and decreases the Assets of Cash.

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