Question

Prior to June 30, a company has never had any treasury stock transactions. A company repurchased 100 shares of its $1 par common stock on June 30 for $40 per share. On July 20, it reissued 50 of these shares at $46 per share. On August 1, it reissued 20 of the shares at $38 per share. What is the journal entry necessary to record the reissuance of treasury stock on July 20?

Debit Cash $2,300; credit Paid-in Capital, Treasury Stock $300; credit Treasury Stock $2,000.

Debit Common Stock $2,300; credit Treasury Stock $2,000; credit Paid-In Capital, Treasury Stock $300.

Debit Cash $2,300; credit Treasury Stock $2,300.

Debit Common Stock $2,300; credit Cash $2,300.

Debit Common Stock $20; debit Treasury Stock $2,290; credit Cash $2,300.

Answer 1

Journal entry

date	account and explanation	Debit	Credit
July 20	Cash (50*46)	2300
	Treasury stock (50*40)		2000
	paid in Capital from sale of treasury stock		300

So answer is a) Debit Cash $2,300; credit Paid-in Capital, Treasury Stock $300; credit Treasury Stock $2,000.