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8 March, 18:16

Treasury stock that had been purchased for $5,500 last month was reissued this month for $6,500. The journal entry to record the reissuance would include a credit to

a. Treasury Stock for $6,500.

b. Paid-In Capital from Sale of Treasury Stock for $6,500.

c. Paid-In Capital from Sale of Treasury Stock for $1,000.

d. Paid-In Capital in Excess of Par-Common Stock for $1,000.

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Answers (1)
  1. 8 March, 22:03
    0
    The correct answer is C

    Explanation:

    The journal entry for the re - issuance will be as follows:

    Cash A/c ... Dr $6,500

    Treasury Stock A/c ... Cr $5,500

    Paid-In Capital from Sale of Treasury Stock A/c ... Cr $1,000

    Working Note:

    Paid-In Capital from Sale of Treasury Stock = Cash - Re-issued amount

    Paid-In Capital from Sale of Treasury Stock = $6,500 - $5,500

    Paid-In Capital from Sale of Treasury Stock = $1,000
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