Pretzel, Inc

question 39

Multiple Choice

Pretzel, Inc. paid $54,000 to buy back 9,000 shares of its $1 par value common stock. The stock was sold later at a selling price of $10 per share. The entry to record the sale would include a:

• A) debit to Paid-in Capital - Treasury Stock $54,000.
• B) debit to Common Stock $54,000.
• C) credit to Paid-in Capital-Treasury Stock $36,000.
• D) credit to Common Stock $36,000.

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Definitions:

Long-Term Debt

Financial obligations of a company that are due more than one year in the future, often used to finance operations, acquire assets, or undertake new projects.

Common Stock

A type of equity security that represents ownership in a corporation, with holders typically having voting rights and receiving dividends.

Flotation Costs

Flotation costs are the total fees and expenses incurred by a company in issuing new securities.

Capital Cost

The one-time expenditure on physical assets like buildings, machinery, and equipment, as well as the costs associated with bringing a project to a commercially operable status.