Question

6800 shares of treasury stock of Concord, Inc., previously acquired at $12 per share, are sold at $18 per share. The entry to record this transaction will include a a. debit to Treasury Stock for $81600. b. debit to Paid-In Capital from Treasury Stock for $40800. c. credit to Treasury Stock for $122400. d. credit to Paid-In Capital from Treasury Stock for $40800.

Answer 1

The correct entry includes a debit to Treasury Stock for $81,600, which is the cost of the shares, and a credit to Paid-In Capital from Treasury Stock for $40,800, which is the excess of the sale price over the cost of the treasury shares.

Step-by-step explanation:

The entry to record the sale of 6800 shares of treasury stock by Concord, Inc., which were previously acquired at $12 per share and sold at $18 per share, would include: a debit to Treasury Stock for $81,600 and a credit to Paid-In Capital from Treasury Stock for $40,800. The treasury stock is debited for the cost of shares which is 6800 shares * $12 = $81,600, and the excess of sale price over cost is credited to the Paid-In Capital from Treasury Stock which is (6800 shares * $18) - $81,600 = $40,800.