A corporation originally issued $6 par value common stock for $12 per share. It purchased the stock for $16 per share. Which of the following is included in the entry to record the sale of 60 shares of treasury stock for $17 per share? Treasury Stock-Common is credited for $960. O Paid-In Capital from Treasury Stock Transactions is credited for $1,020. O Paid-In Capital from Treasury Stock Transactions is debited for $60. O Treasury Stock-Common is credited for $1,020.
A corporation originally issued $6 par value common stock for $12 per share. It purchased the stock for $16 per share. Which of the following is included in the entry to record the sale of 60 shares of treasury stock for $17 per share? Treasury Stock-Common is credited for $960. O Paid-In Capital from Treasury Stock Transactions is credited for $1,020. O Paid-In Capital from Treasury Stock Transactions is debited for $60. O Treasury Stock-Common is credited for $1,020.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:**Understanding Treasury Stock Transactions**
A corporation originally issued $6 par value common stock for $12 per share. It purchased the stock for $16 per share. Which of the following is included in the entry to record the sale of 60 shares of treasury stock for $17 per share?
- ○ Treasury Stock—Common is credited for $960.
- ○ Paid-In Capital from Treasury Stock Transactions is credited for $1,020.
- ○ Paid-In Capital from Treasury Stock Transactions is debited for $60.
- ○ Treasury Stock—Common is credited for $1,020.
**Explanation:**
The company initially issued shares at $12 per share and later repurchased them at $16. Now, selling them at $17 creates a gain which needs to be reflected in the accounting records. It's crucial to analyze which account will be impacted by these transactions.
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