Use the Following Information to Answer the Question Below $\begin{array}{l}\text {Cash } & 40,000\\\text { Treasury Stock-Common }&& 40,000\end{array}$

question 41

Multiple Choice

Use the following information to answer the question below. On January 1,2009,Falcon Corporation had 40,000 shares of $10 par value common stock issued and outstanding.All 40,000 shares had been issued in a prior period at $17 per share.On February 1,2009,Falcon purchased 1,000 shares of treasury stock for $19 per share and later sold the treasury shares for $26 per share on March 2,2009.
The entry to record the sale of the treasury shares on March 2,2009 is:

• A)
• \(\begin{array}{l}
• \text {Cash } & 40,000\\
• \text { Treasury Stock-Common }&& 40,000
• \end{array}\)
• B)
• \(\begin{array}{lr}
• \text { Cash } & 40,000 \\
• \text { Treasury Stock-Common } &&36,000 \\
• \text { Paid-in Capital, Treasury Stock } &&4,000
• \end{array}\)
• C)
• \(\begin{array}{ll}
• \text { Cash } & 40,000 \\
• \text { Treasury Stock-Common } &&36,000\\
• \text { Retained Earnings }&&4,000
• \end{array}\)
• D)
• \(\begin{array}{ll}
• \text { Cash } & 40,000 \\
• \text { Treasury Stock-Common } &&36,000 \\
• \text { Gain on Treasury Stock }&&4,000
• \end{array}\)

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