Prior to June 30, a Company Has Never Had Any

question 107

Multiple Choice

Prior to June 30, a company has never had any treasury stock transactions. A company repurchased 100 shares of its $1 par common stock on June 30 for $40 per share. On July 20, it reissued 50 of these shares at $46 per share. On August 1, it reissued 20 of the shares at $38 per share. What is the journal entry necessary to record the reissuance of treasury stock on July 20 using the cost method?

• A)Debit Common Stock $2,300; credit Cash $2,300.
• B)Debit Common Stock $20; debit Treasury Stock $2,290; credit Cash $2,300.
• C)Debit Common Stock $2,300; credit Treasury Stock $2,000; credit Paid-In Capital, Treasury Stock $300.
• D)Debit Cash $2,300; credit Paid-in Capital, Treasury Stock $300; credit Treasury Stock $2,000.
• E)Debit Cash $2,300; credit Treasury Stock $2,300.

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