In 20X2, Allred Company acquired 11,000 shares of its $1 par value common stock at $23 per share. During 20X3, Allred issued 7,000 of these shares at $31 per share. Allred uses the cost method to account for its treasury stock transactions. What accounts and amounts should Allred credit in 20X3 to record the issuance of the 7,000 shares?

Cash 217,000

Treasury Stock 161,000

Additional Paid-In in excess of par 56,000

to record issuance of 7,000 stock in treasury

Explanation:

When the stock are purchased, under cost method it will be recognize entirely against treasury stock, regardless of the amount paid by the shares. Then, we will recognize an additional paid-in when issued above par

treasury Stock 161,000

Cash 161,000

tp record purchase of own shares

Cash 217,000

Treasury Stock 161,000

Additional Paid-In in excess of par 56,000

to record issuance of 7,000 stock in treasury