On February 22,Brett Corporation acquired 200 shares of its $5 par value common stock for $25 each.On March 15,the company reissued 70 shares for $30 each.What is true of the entry for reissuing the shares?

Question

Quizplus · Accepted Answer

When the company reissues the shares, the cash received exceeds the cost of the shares initially purchased, resulting in an increase in additional paid-in capital. Therefore, the entry should credit Additional Paid in Capital $350. There is no need to debit Treasury Stock because only a portion of the shares acquired were reissued. Cash is also not debited because the company received cash from the sale of shares.

On February 22,Brett Corporation Acquired 200 Shares of Its $5