Rakish Co Purchases 3,500 Shares of the Company's $6 Par Value

question 157

Multiple Choice

Rakish Co. purchases 3,500 shares of the company's $6 par value common stock for $8 per share. It later sells 2,000 shares for $12 per share. Which of the following is the correct journal entry to record this transaction?

• A) Debit Cash $24,000 and credit Treasury stock $24,000.
• B) Debit Cash $24,000, credit Treasury stock $16,000 and credit Paid-in capital $8,000.
• C) Debit Treasury stock $24,000 and credit Cash $24,000.
• D) Debit Common stock $12,000, debit Paid-in capital $12,000 and credit Cash $24,000.

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