To record the transactions for Zirbal Corporation's purchase and reissuance of treasury stock, we will prepare journal entries for both May 3 and November 4.
### May 3: Purchase of Treasury Stock
Transaction:
Zirbal Corporation purchased 6,000 shares of its own stock for [tex]$60,000 cash.
Journal Entry:
- Debit the Treasury Stock account for $[/tex]60,000 to reflect the purchase cost of the treasury shares.
- Credit the Cash account for [tex]$60,000 to show the outflow of cash for this purchase.
#### May 3 Journal Entry:
| Date | Account Titles | Debit | Credit |
|------|-------------------------|---------|---------|
| May 3| Treasury Stock | $[/tex]60,000 | |
| | Cash | | [tex]$60,000 |
### November 4: Reissuance of Treasury Stock
Transaction:
Zirbal Corporation reissued 1,500 shares of its treasury stock for $[/tex]16,500 cash.
Journal Entry:
- Debit the Cash account for [tex]$16,500 to record the cash received from the reissuance.
- Credit the Treasury Stock account for $[/tex]15,000 to reflect the original cost (proportionate) of the 1,500 reissued shares.
- Credit the Paid-in Capital from Treasury Stock account for the balance of [tex]$1,500 (the excess amount received over the cost of the treasury shares).
#### November 4 Journal Entry:
| Date | Account Titles | Debit | Credit |
|------------|--------------------------------------|---------|---------|
| November 4 | Cash | $[/tex]16,500 | |
| | Treasury Stock | | [tex]$15,000 |
| | Paid-in Capital from Treasury Stock | | $[/tex]1,500 |
In summary, the journal entries appropriately reflect the purchase and subsequent reissuance of Zirbal Corporation's treasury stock.
