In: Accounting
On December 2, Coley Corp. acquired 900 shares of its $3 par value common stock for $21 each.
On December 20, Coley Corp. resold 500 shares for $15 each. Which
of the following is correct regarding the journal entry for the
resold shares?
Debit Cash $13,500
Credit Treasury Stock $10,500
Credit Additional Paid–in Capital $6,000
Credit Treasury Stock $7,500
· When treasury stock is resold:
Cash is debited by amount at which these are reissued.
Treasury Stock is credited by the amount of cost of shares
reissued.
· Cash to be debited = 500 shares x $ 15 = $ 7500
· Treasury Stock to be credited by = 500 shares x $ 21 = $ 10,500
· Correct Answer = Option
#2
Credit Treasury Stock for $ 10,500