On April 16, 2010, Rodriguez Corporation reacquired 12,000 shares of its own $10 par stock for $660,000 cash. On November 4, 2011, 1,000 of the treasury shares were reissued at a price of $65 per share. The journal entry to record the reissuance of the 1,000 shares of stock on November 4 includes a:

Question

Quizplus · Accepted Answer

When a company reissues treasury stock, the Common Stock account is credited for the par value of the shares being reissued ($10,000 in this case), and any excess over the purchase price is credited to Additional Paid-In Capital: Treasury Stock Transactions. Therefore, the journal entry would include a credit to Common Stock of $10,000 and a credit to Additional Paid-In Capital: Treasury Stock Transactions of $55,000 ($65 per share - $10 par value per share = $55 per share excess, multiplied by 1,000 shares). The other answer choices are incorrect because they do not reflect the correct accounting treatment for the reissuance of treasury stock.

On April 16, 2010, Rodriguez Corporation Reacquired 12,000 Shares of Its