Oregon Outfitters Issues 1,000 Shares of $1 Par Value Common

question 142

Essay

Oregon Outfitters issues 1,000 shares of $1 par value common stock at $20 per share. Later in the year, the company decides to repurchase 200 shares at a cost of $22 per share. (1) Record the original issue of the 1,000 shares, (2) Record the repurchase of 200 shares, and (3) Record the entry if Oregon Outfitters reissues the 200 shares of treasury stock at $25 per share.

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Definitions:

Exchange Gain

A profit resulting from holding assets in a foreign currency as the exchange rate fluctuates.

Exchange Loss

A loss resulting from holding foreign currencies that depreciate against the home currency.

Forward Contract

An agreement to purchase or sell an asset at a predetermined future date and price, often used as a hedging instrument against price fluctuations.

Recognition

The process in accounting where certain transactions are recorded in the financial statements of a reporting period.