On November 6,Coleman Corp.acquired 1,000 shares of its $2 par value common stock for $27 each.On November 20,Coleman Corp.reissued 400 shares for $30 each.Which of the following is correct regarding the effect of the journal entry for the reissued shares?

Question

Quizplus · Accepted Answer

When a company reissues its own shares, it receives the proceeds from the sale as a part of its equity. Therefore, the journal entry for reissued shares would increase the stockholders' equity account. Neither assets nor liabilities are affected by this transaction, and expenses are not relevant in this context.