Use the Following Information to Answer the Question Below $\$ 20$

question 116

Multiple Choice

Use the following information to answer the question below. The following transactions involving Lupine Corporation occurred during the year:
Apr. 1 Purchased 2,000 shares of its own preferred stock for $\$ 20$ , the current market price. This is the first transaction involving its own stock engaged in by the company.

May 3 Sold 400 of the shares purchased on April 1 for \$25 per share.
June 5 Retired 600 of the shares purchased on April 1. The original issue price was $\$ 10$ . The par value of the stock is $\$ 5$ .

The entry to record the May 3 transaction would be:

• A)
• \(\begin{array}{l}
• \text {Treasury Stock, Preferred } & 10,000\\
• \text { Cash}&& 10,000
• \end{array}\)
• B)
• \(\begin{array}{l}
• \text { Cash }&10,000\\
• \text { Treasury Stock-Common } && 8,000 \\
• \text { Gain on Treasury Stock } &&2,000
• \end{array}\)
• C)
• \(\begin{array}{l}
• \text { Cash }&4,000\\
• \text { Retained Earnings } & 6,000 \\
• \text { Treasury Stock-Common } &&10,000
• \end{array}\)
• D)
• \(\begin{array}{l}
• \text {Treasury Stock, Preferred } & 8,000\\
• \text { Cash}&& 8,000
• \end{array}\)

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Definitions:

Basic Beliefs

Foundational principles or convictions that are accepted as true by an individual or group, shaping attitudes and behavior.

Antecedent

An event, condition, or cause that happens before another event and influences it.

Stimulus

Any event, object, or signal that triggers a response or reaction from an organism or system.

Consequence

The result or effect of an action or condition, often used in the context of discussing the outcomes of decisions or events.