Rondo Auto Acquired 3,500 of Its Own Shares at $32

question 20

Multiple Choice

Rondo Auto acquired 3,500 of its own shares at $32 per share.The shares are to be held in Treasury.The par value of Rondo Auto's common stock is $2.50 per share.If Rondo Auto were to resell all its treasury stock at $35 per share,what journal entry would Rondo Auto make?

• A)\(\begin{array}{lll}
• \text { Cash } & 122,500 & \\
• \text { Additional Paid-in Capital } & & 112,000 \\
• \text { Treasury Stock } && 110,500& \\
• \end{array}\)
• B)\(\begin{array}{lccc}
• \text { Cash } & 122,500 & \\
• \text { Additional Paid-in Capital } & & 10,500 \\
• \text { Treasury Stock } & &112,000 \\
• \end{array}\)
• C)\(\begin{array}{lccc}
• \text { Cash } & 122,500 & \\
• \text { Treasury Stock } & & 112,000 \\
• \text { Gain on Sale of Treasury Stock } && 10,500\\
• \end{array}\)
• D)\(\begin{array}{lccc}
• \text { Cash } & 122,500 & \\
• \text { Additional Paid-in Capital } & & 103,250 \\
• \text { Treasury Stock } & &8,750 \\
• \quad \text { Gain on Sale of Treasury Stock } && 10,500 \\
• \end{array}\)
• E) \(\begin{array}{lccc}
• \text { Cash } & 122,500 & \\
• \text { Common Stock } & & 8,750 \\
• \text { Treasury Stock } & &112,000 \\
• \text { Gain on Sale of Treasury Stock } && 1,750
• \end{array}\)

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