Question

In: Accounting

When treasury stock is sold for more than the par value and the cost of the...

When treasury stock is sold for more than the par value and the cost of the stock, what account(s) should be credited?

Select one:

a. Treasury Stock for the cost and additional paid-in capital for the excess of the sale price over the cost

b. Additional paid-in capital for the sale price

c. Treasury Stock for the sale price

d. Common Stock for the par value and retained earnings for the excess of the sale price over the par value

e. Common Stock for the sale price

Expert Solution

Answer -

When treasury stock is sold for more than the par value and the cost of the stock then the treasury stock for the cost and additional paid-in capital for the excess of the sale price over the cost, should be credited.

The journal entry for the sale of treasury stock would be :-

General Journal

Debit ($)

Credit ($)

Cash

Treasury stock

Paid-in capital from treasury stock

XXX

-

XXX

Hence, Option - (a) is Correct.

Note - Option - (b), Option - (c), Option - (d) and Option - (e) are incorrect, because all these statement are False.

ekkarill92 answered 2 years ago

A ten-year Treasury note with a 5.000% coupon rate is sold at par value in the...

A ten-year Treasury note with a 5.000% coupon rate is sold at par value in the primary market (assume par value is $100). Bill purchases the Treasury note at a price of 103.000 when it has five years left to maturity and it has a 4.326% yield-to-maturity. Bill holds the Treasury note for three years and then sells it to George in the secondary market. George then holds the Treasury note to maturity. Assume three years from when Bill purchases...

The most used method of accounting for treasury stock is the ________ method. A) par value...

The most used method of accounting for treasury stock is the ________ method. A) par value B) cost C) fair value D) A and B are utilized equally

If an asset is sold (market value) for more or less than its book value that...

If an asset is sold (market value) for more or less than its book value that used for tax purposes, and adjustment must be made to the taxable income during the year. How this difference in market value and book value affect the taxable income?

what is the par value of treasury bond futures?

Treasury Stock Coastal Corporation issued 25,000 shares of $14 par value common stock at $26 per...

Treasury Stock Coastal Corporation issued 25,000 shares of $14 par value common stock at $26 per share and 6,000 shares of $59 par value, eight percent preferred stock at $85 per share. Later, the company purchased 3,000 shares of its own common stock at $29 per share. a. Prepare the journal entries to record the share issuances and the purchase of the common shares. b. Assume that Coastal sold 2,000 shares of the treasury stock at $33 per share. Prepare...

Treasury Stock Coastal Corporation issued 25,000 shares of $7 par value common stock at $19 per...

Treasury Stock Coastal Corporation issued 25,000 shares of $7 par value common stock at $19 per share and 6,000 shares of $52 par value, eight percent preferred stock at $80 per share. Later, the company purchased 3,000 shares of its own common stock at $22 per share. a. Prepare the journal entries to record the share issuances and the purchase of the common shares. b. Assume that Coastal sold 2,000 shares of the treasury stock at $26 per share. Prepare...

How is the issuance of stock accounted for? When issuing common stock at par value, the...

How is the issuance of stock accounted for? When issuing common stock at par value, the journal entry would be to debit __________ and credit __________________. How is treasury stock accounted for? What is treasury stock? Why might a company later reacquire some of its own stock as treasury stock? ABC company recently repurchased some of its own stock as treasury stock for $1,000. The company is now selling the treasury stock for $1,100. The journal entry would be:...

If a bond is selling for more than its par value and the market interest rate...

If a bond is selling for more than its par value and the market interest rate remains unchanged during the life of the bond, then as the maturity date approaches, how will the price (value) of the bond change? a. Increase b. Cannot determine c. Remain unchanged d. Decrease

If you buy a bond for more than par value it is either because you required...

If you buy a bond for more than par value it is either because you required rate of return, or market rates for like bonds, have: declined since the bonds original issue no real impact on your decision increased since the bonds original issue stabilized due to growth in the economy lots of shiny jewelry that sweetens the deal

Which one of the following is correct? US treasury bonds have more risk than common stock...

Which one of the following is correct? US treasury bonds have more risk than common stock Common stock has more risk than secured bonds Secured bonds have less risk than US treasury bonds Secured debt has more risk than unsecured debt The following statements are true about mutual funds except which one: Mutual funds invest mostly in private unlisted companies not public stocks Mutual funds are appropriate for small investors Some mutual funds charge upfront “loads”, and some do not...