Treasury stock that had been purchased for $5,600 last month was reissued this month for $8,500. The journal entry to record the reissuance would include a credit to
A) Treasury Stock for $8,500
B) Paid-In Capital from Sale of Treasury Stock for $8,500
C) Paid-In Capital in Excess of Par-Common Stock for $2,900
D) Paid-In Capital from Sale of Treasury Stock for $2,900

Question

Quizplus · Accepted Answer

The correct entry includes crediting Treasury Stock for the cost of the shares ($5,600) and crediting Paid-In Capital from Sale of Treasury Stock for the excess of the reissue price over the cost ($2,900). Since the reissue price ($8,500) is higher than the cost ($5,600), the difference is credited to Paid-In Capital from Sale of Treasury Stock.

Treasury Stock That Had Been Purchased for $5,600 Last Month