Question

Sheffield Company originally issued 5400 shares of $10 par value common stock for $162000 ($30 per share). Sheffield subsequently purchases 530 shares of treasury stock for $26 per share and resells the 530 shares of treasury stock for $31 per share. In the entry to record the sale of the treasury stock, there will be a:______.

a. credit to Paid-In Capital from Treasury Stock for $2650.
b. credit to Common Stock for $13780.
c. credit to Treasury Stock for $5300.
d. debit to Paid-In Capital in Excess of Par of $15900.

Answer 1

a. credit to Paid-In Capital from Treasury Stock for $2650.

Step-by-step explanation:

the complete journal entries required to record the 3 operations:

Dr Cash 162,000

Cr Common stock 54,000

Cr Additional paid in capital 108,000

Dr Treasury stock 13,780

Cr Cash 13,780

Dr Cash 16,430

Cr Treasury stock 13,780

Cr Additional paid in capital 2,650