Denny's Deli, Inc.
The stockholders' equity section of the December 31, 2011, balance sheet for Denny's Deli appeared as follows:

- Assume that all of the 40,000 shares of Denny's stock that was issued as of December 31, 2011, was issued for $35 per share. On March 1, 2012, Denny reacquired 5,000 shares of its common stock for $43 per share.
Refer to the information presented above for Denny's Deli, Inc. Suppose that Denny reissued 1,500 shares of its treasury stock on June 1, 2012, for $50 each. Which of the following is true regarding the entry required to record this transaction?

Question

Denny's Deli, Inc. 
The stockholders' equity section of the December 31, 2011, balance sheet for Denny's Deli appeared as follows:

-  Assume that all of the 40,000 shares of Denny's stock that was issued as of December 31, 2011, was issued for $35 per share. On March 1, 2012, Denny reacquired 5,000 shares of its common stock for $43 per share.
Refer to the information presented above for Denny's Deli, Inc. Suppose that Denny reissued 1,500 shares of its treasury stock on June 1, 2012, for $50 each. Which of the following is true regarding the entry required to record this transaction?

Quizplus · Accepted Answer

The treasury stock was initially reacquired at $43 per share, totaling $64,500 for 1,500 shares. When reissued at $50 per share, the difference of $10,500 is credited to additional paid-in capital, not retained earnings.