In 2021, Southwestern Corporation completed the treasury stock transactions listed below. February March May 2: Reacquired 77,000 shares at $12.70. 17: Sold 27,000 shares at $14.35. 17: Sold 32,800 shares at 58.35. Southwestern had issued 100,000 shares of its $1 par common stock for $10 several months ago Required: Prepare the journal entries to record the above transactions, using the cost method. (If no entry is require select "No journal entry required" in the first account field.)

Using the cost method Equity shares journal entry for feb 2 will be Bank A/c Dr. 9,77,900 To equity share application A/c 9,77,900, mar 17 equity share application A/c Dr, ‬‬‬3,87,450 To Bank A/c 3,87,450 may 17 equity share application A/c Dr 2,67,200 To Bank A/c 2,67,200.

Certain investments are recorded using the cost method of accounting in a company's financial statements. When an investor owns an investment that it has little or no control over—typically represented as owning less than 20% of the company—they use this method.

The investor lists the investment's cost as an asset. Dividend income is recorded as income when it is received and appears on the income statement. In either the investing section or the operating section of the cash flow statement, receiving a dividend also results in an increase in cash flow.

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