A corporation reacquired 400 shares of its $100 par-value common stock for $105 a share.The entry to record this transaction includes a

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The entry to record the reacquisition of treasury stock includes a debit to Treasury Stock-Common for the cost of the shares reacquired, which is 400 shares x $105 per share = $42,000. There is no credit to Paid-in Capital for treasury stock transactions, as this account records any additional paid-in capital that results from the sale of treasury stock above the cost of the stock.

A Corporation Reacquired 400 Shares of Its $100 Par-Value Common