On December 2, Coley Corp. reacquired 1,000 shares of its $2 par value common stock for $27 each. On December 20, Coley Corp. reissued 400 shares for $15 each. Which of the following is correct regarding the journal entry for the reissued shares?

a. Debit Cash $15,000.

b. Credit Treasury Stock $10,800.

c. Credit Paid in Capital - Treasury Stock $5,200.

d. Credit Treasury Stock $6,000.

Question

Tucker Snyder

Business

19 July, 03:30

On December 2, Coley Corp. reacquired 1,000 shares of its $2 par value common stock for $27 each. On December 20, Coley Corp. reissued 400 shares for $15 each. Which of the following is correct regarding the journal entry for the reissued shares?

a. Debit Cash $15,000.

b. Credit Treasury Stock $10,800.

c. Credit Paid in Capital - Treasury Stock $5,200.

d. Credit Treasury Stock $6,000.

+1

Answers (1)

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Hannah · Answer 1

b. Credit Treasury Stock $10,800.

Explanation:

The Journal entry is shown below:-

Cash Dr, $6,000 (400 * $15)

Retained Earnings Dr, $4,800

To Treasury Stock $10,800 (400 * 27)

(Being reissued shares is recorded)

Here we debited the cash and retained earnings as it increased the cash and reduced the retained earning balance and we credited the treasury stock as it reduced the balance of treasury stock