On April 16,2018,Rodriguez Corporation reacquired 12,000 shares of its own $10 par stock for $660,000 cash.On November 4,2019,1,000 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 its treasury stock, it typically records the transaction at the cost paid to reacquire the stock. In this case, the cost paid by Rodriguez Corporation to reacquire the 1,000 shares was $65,000 (1,000 shares x $65 per share). Therefore, the entry to record the reissuance of the shares on November 4 would be a debit to Cash for $65,000 and a credit to Treasury Stock Reissued for $65,000. Since the shares were originally issued at $10 per share, there would be an increase in Additional Paid-In Capital of $55 per share ($65 reissued price - $10 par value). So, the entry would also include a credit to Additional Paid-In Capital: Treasury Stock Transactions for $55,000 (1,000 shares x $55 per share).

On April 16,2018,Rodriguez Corporation Reacquired 12,000 Shares of Its Own