Question

On December 2, Coley Corp. acquired 1,400 shares of its $3 par value common stock for $24 each. On December 20, Coley Corp. resold 1,000 shares for $10 each. Which of the following is correct regarding the journal entry for the resold shares?A. Credit Treasury Stock $5,000B. Credit Treasury Stock $12,000C. Credit Additional Paid in Capital $3,000D. Debit Cash $9,000

Answer 1

Answer:

Explanation:

The journal entry to record the resold share is shown below:

Cash A/c Dr $10,000       (1,000 shares × $10)

    To Common Stock $3,000          (1,000 shares × $3)

    To  Additional Paid-in Capital in excess of par - Common Stock $7,000

     (1,000 shares × $7)

(Being the resold shares is recorded and the remaining balance is credited to the additional paid-in capital account)

While reselling the stock, we debited the cash account and credited the common stock and additional paid-in capital account

All other information which is given is not relevant. Hence, ignored it