On December 2, Coley Corp. acquired 1,800 shares of its $4 par value common stock for $23 each. On December 20, Coley Corp. resold 1,400 shares for $13 each. Which of the following is correct regarding the journal entry for the resold shares?

a. Credit Additional Paid-in Capital $7,000

b. Credit Treasury Stock $20,000

c. Debit Cash $15,400

d. Credit Treasury Stock $11,000

e. None of these

b. Credit Treasury Stock $20,000

Explanation:

General Journal

For the reacquisition of shares of common stock

Date Account Titles and Explanation Debit Credit

Dec 2 Treasury stock $28,000

Cash (1,400 shares * $20 each) $28,000 (To record the repurchase of shares of common shares

General Journal

For the reissue of shares treasury stock

Date Account Titles and Explanation Debit Credit

Dec 20 Cash (1,000 shares * $11 each) $11,000

Paid-in-capital in excess of par $9,000

- Treasure stock

Treasury stock $20,000

(1,000 shares * $20 per share)

(To record the reissue of treasury stock)

Conclusion: The journal entry to record the reissue of treasury stock is Credit Treasury Stock $20,000.