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 purchase of treasury stock involves a debit to the Treasury Stock-Common account for the cost of the shares purchased. In this case, the corporation reacquired 400 shares of its $100 par-value common stock for $105 a share, resulting in a total cost of $42,000 (400 x $105). Therefore, the entry to record this transaction should include a debit to Treasury Stock-Common for $42,000. Option A is incorrect because it does not reflect the full cost of the stock reacquired. Option C is also incorrect because it would only come into play if there were a difference between the cost of the treasury stock and its original cost. Option D is incorrect because it reflects a credit entry, which is not appropriate when purchasing treasury stock.

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