Question

Q3) If a company reissued at $20 per share 100 shares of treasury stock that it...

Q3) If a company reissued at $20 per share 100 shares of treasury stock that it had previously acquired for $28 per share and there wasn’t any Paid-in Capital from Treasury Stock, it would debit

A-Loss on Sale of Treasury Stock for $800
B- Paid-in Capital from Common Stock for $800
C- Retained Earnings for $800
D- Treasury Stock for $800
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Answer #1

Correct answer---(C) Retained Earnings for $800

Following journal entry will be made for above transaction

Transaction

Accounts

Debit

Credit

1

Cash ($20 x 100)

$        2,000.00

Retained earnings ($8 x 100)

$            800.00

                Treasury stock ($28 x 100)

$    2,800.00

(To record sale of treasury stock)
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