Use the Information Above to Answer the Following Question

question 176

Multiple Choice

Use the information above to answer the following question.What journal entry will record the reissuance on July 3?

• A) Debit Cash and credit Treasury Stock for $20,000
• B) Debit Cash for $20,000, credit Treasury Stock for $16,000, and credit Additional Paid-in Capital for $4,000
• C) Debit Cash for $20,000, credit Common Stock for $6,000, and credit Additional Paid-in Capital for $14,000
• D) Debit Cash for $20,000, credit Common Stock for $16,000, and credit Gain on Reissuance of Stock for $4,000

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Definitions:

Annual Payments

Annual payments refer to the total amount of money that is paid out or required to be paid each year, often related to loans, annuities, or dividends.

Borrowed

The act of obtaining or receiving funds or goods with the promise or understanding of returning or repaying the lender at a later date, usually with interest.

Interest Rate

The proportion, in a percentage, at which interest is paid by borrowers for the use of money that they borrow from a lender. It is a critical component of the credit markets.

Years

A unit of time equal to 365 days (or 366 days in a leap year), used in calendar timekeeping.