Refer to Ladder Distributors. Suppose the company reissued 1,000 shares of its treasury stock on June 1, 2015, for $44 each. Which of the following is true regarding the entry required to record this transaction?

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Quizplus · Accepted Answer

When a company reissues treasury stock, the transaction increases the amount of outstanding stock, which is recorded by crediting the treasury stock account. The amount received for the reissued stock is recorded as a debit to cash. In this case, the company reissued 1,000 shares at $44 each, so the total amount received is $44,000. Therefore, the entry required to record this transaction is a debit to cash for $44,000 and a credit to treasury stock for $44,000. Option B correctly identifies the credit to treasury stock, whereas options A, C, and D are incorrect.