California Surf Clothing Company issues 1,000 shares of $1 par value common stock at $32 per share. Later in the year, the company decides to Purchase 100 shares at a cost of $35 per share. Record the transaction if California Surf resells the 100 shares of treasury stock at $37 per share

Debit = $3,700

Credit = $200

Credit = $3,500

Explanation:

The following transactions are recorded in California Surf clothing company

1) Cash debit is acquired through the reissuance of 100 shares of treasury stock at the rate of $37 per share

= $37 per share * 100 shares

= $3,700

2) Credit from the additional paid in capital

= $37 per share - $35 per share

= $2 per share * 100 shares

= $200

3) Credit gotten from the required stock

= $3,700 - $200

= $3,500