and Corporation reported the following:Common Stock, $5 par, 211,000 shares authorized, 165,000 shares issued $825,000Paid in Capital in Excess of PaCr ommon 217,000Retained Earnings 207,000Total Stockholders' Equity $1,249,000Which of the following is included in the entry to record the corporation's purchase of 40,000 shares of itscommon stock for $12.00 per share? A) Treasury StockCommon is debited for $480,000. B) Retained Earnings is debited for $480,000. C) Paid-In Capital from Treasury Stock Transactions is credited for $135,000. D) Common Stock$5 Par Value is credited for $200,000.

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Business

Hodge

24 March, 23:38

and Corporation reported the following:Common Stock, $5 par, 211,000 shares authorized, 165,000 shares issued $825,000Paid in Capital in Excess of PaCr ommon 217,000Retained Earnings 207,000Total Stockholders' Equity $1,249,000Which of the following is included in the entry to record the corporation's purchase of 40,000 shares of itscommon stock for $12.00 per share? A) Treasury StockCommon is debited for $480,000. B) Retained Earnings is debited for $480,000. C) Paid-In Capital from Treasury Stock Transactions is credited for $135,000. D) Common Stock$5 Par Value is credited for $200,000.

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Lil Girl · Answer 1

Treasury Stock Common is debited for $480,000

Explanation:

40,000 shares x $12 per share = $480,000

The purchase of stock will be recorded at cost:

treasury stock 480,000 debit

cash 480,000 credit

The common stock and additional paid-in capital are not modified.

If the company sales his Treasury Stock it will recognize the difference against paid-in capital

If the company retires this shares, it will adjust agains common stock and additional paid-in