Rick Co Purchases 7,000 Shares of Its Own $2 Par Value

question 130

Multiple Choice

Rick Co. purchases 7,000 shares of its own $2 par value common stock for $160 per share. Which of the following is the correct journal entry to record this transaction?

• A)Debit Common Stock-$2 Par Value $2,240,000 and credit Cash $2,240,000.
• B)Debit Cash $2,240,000, and credit Paid-In Capital in Excess of Par-Common $2,240,000.
• C)Debit Cash $2,240,000 and credit Treasury Stock-Common $2,240,000.
• D)Debit Treasury Stock-Common $1,120,000 and credit Cash $1,120,000.

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