Accounting 2

Fechter Corporation had the following stockholders’ equity accounts on January 1, 2020: Common Stock ($5 par) $500,000, Paid-in Capital in Excess of Par—Common Stock $200,000, and Retained Earnings $100,000. In 2020, the company had the following treasury stock transactions.

Mar.	1		Purchased 5,000 shares at $8 per share.
June	1		Sold 1,000 shares at $12 per share.
Sept.	1		Sold 2,000 shares at $10 per share.
Dec.	1		Sold 1,000 shares at $7 per share.

Fechter Corporation uses the cost method of accounting for treasury stock. In 2020, the company reported net income of $30,000.

Journalize the treasury stock transactions, and prepare the closing entry at December 31, 2020, for net income. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit

Open accounts for (1) Paid-in Capital from Treasury Stock, (2) Treasury Stock, and (3) Retained Earnings. (Post to T-accounts.) (Post entries in the order of journal entries presented in the previous part.)

Paid-in Capital from Treasury Stock
Treasury Stock
Retained Earnings

Prepare the stockholders’ equity section for Fechter Corporation at December 31, 2020. (Enter the account name only and do not provide the descriptive information provided in the question.)

Fechter Corporation Balance Sheet (Partial)
					$
			$
:
					$

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