N December 2, Coley Corp. acquired 1,700 shares of its $2 par value common stock for $21 each. On December 20, Coley Corp. resold 1,300 shares for $12 each. Which of the following is correct regarding the journal entry for the resold shares?

Credit Additional Paid-in Capital $7,000

Credit Treasury Stock $20,000

Debit Cash $15,400

Credit Treasury Stock $11,000

Question

Business

Lucian Christensen

8 June, 20:34

N December 2, Coley Corp. acquired 1,700 shares of its $2 par value common stock for $21 each. On December 20, Coley Corp. resold 1,300 shares for $12 each. Which of the following is correct regarding the journal entry for the resold shares?

Credit Additional Paid-in Capital $7,000

Credit Treasury Stock $20,000

Debit Cash $15,400

Credit Treasury Stock $11,000

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Answers (1)

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Lawrence Mccullough · Answer 1

Credit Treasury Stock $20,000

Explanation:

When the company reissued the shares, the Treasury Stock account is credited by the same price they were acquire. i. e. in this case we acquire the treasury stock at a price of $20.

Cash (1,000 * 12) 12,000

Additional Paid in Capital 8,000

Treasury Stock (1,000 * 20) 20,000