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

-Assume that all of the 2,000 shares of Bravo's stock that was issued as of December 31, 2011, was issued for $3.50 per share. On March 1, 2012, Bravo reacquired 1,000 shares of its common stock for $4.50 per share.
Refer to the information presented above for Bravo Bistro, Inc. The journal entry to record the transaction on March 1 includes a credit to what account and for what amount?

Question

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

-Assume that all of the 2,000 shares of Bravo's stock that was issued as of December 31, 2011, was issued for $3.50 per share. On March 1, 2012, Bravo reacquired 1,000 shares of its common stock for $4.50 per share.
Refer to the information presented above for Bravo Bistro, Inc. The journal entry to record the transaction on March 1 includes a credit to what account and for what amount?

Quizplus · Accepted Answer

The journal entry to record the reacquisition of stock includes a credit to cash for the amount paid, which is 1,000 shares reacquired at $4.50 per share, totaling $4,500.