Question

Treasury stock that had been purchased for $4,566 last month was reissued this month for $5,184. What would the journal entry to record the reissuance include?a. Credit to Treasury Stock for $618b. Credit to Treasury Stock for $4,566c. Credit to Excess of Par/Common for $618d. Debit to Treasury Stock for $4,566

Answer 1

Answer:

The answer can include both C and D. Description below.

Explanation:

We make the following records.

The treasury stock was reissued at a premium of 5184 - 4556 = $628

Since treasury stock is  credit account by nature we debit  to reduce it by the Amount of $4,566

$628 is to be credited to the paid in capital as this is premium received in excess of par value of the stock. Since there is no mention of premium or paid in capital account we may credit the Excess of Par/Common.

Hope that helps.