Farm and Supply reissued 120 shares of treasury stock at $24 that had been reacquired for $11 per share. What is the entry?

Question

Quizplus · Accepted Answer

The correct entry is to debit Cash for the total amount received from the reissue ($24 x 120 shares = $2,880), credit Treasury Stock for the cost of the shares when they were reacquired ($11 x 120 shares = $1,320), and credit Paid-In Capital from Treasury Stock for the difference ($2,880 - $1,320 = $1,560). This reflects the inflow of cash, the reduction of treasury stock at cost, and the recognition of the excess received over cost as additional paid-in capital.

Farm and Supply Reissued 120 Shares of Treasury Stock at $24