Slater Roofing Company originally issued 6,000 shares of $10 par value common stock for $180,000 ($30 per share). Slater subsequently purchases 600 shares of treasury stock for $27 per share and resells the 600 shares of treasury stock for $29 per share. In the entry to record the sale of the treasury stock, there will be a:
A. credit to Paid-In Capital from Treasury Stock for $1,200.
B. credit to Treasury Stock for $6,000.
C. debit to Paid-In Capital in Excess of Par of $18,000.
D. credit to Common Stock for $16,200.
Journal entry is made by the company to record all the debits and credits going on into the business transactions. It also has additional comments which clarify the transactions more clearly.
Answer and Explanation:
|Date||account and explanation||Debit||credit|
|Treasury Stock ($600*$27)||$16,200|
|Paid in Capital from the sale of treasury stock||$1,200|
|(To record sale of treasury stock)|
So the answer is a) credit to Paid-In Capital from Treasury Stock for $1,200.
Become a member and unlock all Study Answers
Try it risk-free for 30 daysTry it risk-free
Ask a question
Our experts can answer your tough homework and study questions.Ask a question Ask a question
Learn more about this topic:
from Accounting 101: Financial AccountingChapter 3 / Lesson 10