Use the Following Information to Answer the Question Below $\$ 20$

Use the following information to answer the question below. The following transactions involving Lupine Corporation occurred during the year:
Apr. 1 Purchased 2,000 shares of its own preferred stock for $\$ 20$ , the current market price. This is the first transaction involving its own stock engaged in by the company.

May 3 Sold 400 of the shares purchased on April 1 for \$25 per share.
June 5 Retired 600 of the shares purchased on April 1. The original issue price was $\$ 10$ . The par value of the stock is $\$ 5$ .

The entry to record the May 3 transaction would be:

A)
$\begin{array}{l}\text {Treasury Stock, Preferred } & 10,000\\\text { Cash}&& 10,000\end{array}$


B)
$\begin{array}{l}\text { Cash }&10,000\\\text { Treasury Stock-Common } && 8,000 \\\text { Gain on Treasury Stock } &&2,000 \end{array}$


C)
$\begin{array}{l}\text { Cash }&4,000\\\text { Retained Earnings } & 6,000 \\\text { Treasury Stock-Common } &&10,000 \end{array}$


D)
$\begin{array}{l}\text {Treasury Stock, Preferred } & 8,000\\\text { Cash}&& 8,000\end{array}$