Prior to September 30,a Company Has Never Had Any Treasury

question 78

Multiple Choice

Prior to September 30,a company has never had any treasury stock transactions.A company repurchased 1,000 shares of its $2 par common stock on September 30 for $20 per share.On October 2,it reissued 400 of these shares at $21 per share.On October 12,it reissued the remaining 600 shares at $19 per share.The journal entry to record the purchase of the shares on September 30 would be:

• A)Debit Treasury Stock,$20,000; Credit Cash,$20,000.
• B)Debit Common Stock,$20,000; Credit Cash,$20,000.
• C)Debit Cash,$20,000; Credit Treasury Stock,$20,000.
• D)Debit Cash,$20,000; Credit Common Stock,$2,000,Credit Paid-in Capital in Excess of Par Value,Common Stock,$18,000.
• E)Debit Cash,$8,400,Credit Treasury Stock,$8,000,Credit Paid-in Capital in Excess of Par Value,Common Stock,$400.

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