Question

Stock was reissued at a lower price. $25 was the issue price. Kylie Jenner Cosmetics reissues 5,000 shares of this treasury stock for $23 per share. What is the journal entry for this reissuance?

A) Debit Cash $115,000; Credit Treasury Stock $125,000; Credit Paid-in Capital from Treasury Stock $10,000

B) Debit Cash $115,000; Credit Treasury Stock $125,000; Credit Retained Earnings $10,000

C) Debit Cash $115,000; Credit Treasury Stock $115,000

D) Debit Cash $115,000; Credit Treasury Stock $125,000

Answer 1

The journal entry for the reissuance of treasury stock includes debiting cash, crediting treasury stock, and crediting paid-in capital from treasury stock.

Step-by-step explanation:

The journal entry for the reissuance of 5,000 shares of treasury stock by Kylie Jenner Cosmetics would be:

Debit Cash $115,000;

Credit Treasury Stock $125,000;

Credit Paid-in Capital from Treasury Stock $10,000

This journal entry reflects the decrease in cash as the company receives $23 per share for the reissued stock, the decrease in the treasury stock account as it is no longer held by the company, and the increase in the paid-in capital from treasury stock account to record the difference between the issue price and the reissue price of the stock.