Which of the following entries would be recorded when a company reissues 1,000 shares of treasury stock for $40 per share when they were repurchased at a cost of $44 per share and have a $1 par value? $\begin{array}{lr}
\text { A. Cash } & 40,000 \
\text { Capital in excess of par value } & 4,000 \
\text { Treasury Stock } && 44,000
\end{array}$

$\begin{array}{lrr}
\text { B. Cash } & 40,000 & \
\text { Loss on sale of treasury stock } & 4,000 & \
\text { Treasury Stock } & & 44,000
\end{array}$

$\begin{array}{lrr}
\text { C. Cash } & 40,000 & \
\text { Capital in excess of par value } & 4,000 & \
\text { Common Stock } & & 44,000
\end{array}$

$\begin{array}{lrr}
\text { D. Cash } & 40,000 & \
\text { Common Stock } & &1,000 \
\text { Capital in excess of par value } && 39,000
\end{array}$

A)Option A
B)Option B
C)Option C
D)Option D

Question

Which of the following entries would be recorded when a company reissues 1,000 shares of treasury stock for $40 per share when they were repurchased at a cost of $44 per share and have a $1 par value? $\begin{array}{lr}
\text { A. Cash } & 40,000 \
\text { Capital in excess of par value  } & 4,000 \
\text { Treasury Stock } && 44,000
\end{array}$

$\begin{array}{lrr}
\text { B. Cash } & 40,000 & \
\text { Loss on sale of treasury stock } & 4,000 & \
\text { Treasury Stock } & & 44,000
\end{array}$

$\begin{array}{lrr}
\text { C. Cash } & 40,000 & \
\text { Capital in excess of par value } & 4,000 & \
\text { Common Stock } & & 44,000
\end{array}$

$\begin{array}{lrr}
\text { D. Cash } & 40,000 & \
\text { Common Stock } & &1,000 \
\text { Capital in excess of par value } && 39,000
\end{array}$

A)Option A
B)Option B
C)Option C
D)Option D

Quizplus · Accepted Answer

When treasury stock is reissued, the difference between the repurchase price and the reissue price is recorded as a gain or loss on the sale of treasury stock. In this case, the company repurchased the shares at $44 per share and reissued them at $40 per share, resulting in a loss of $4 per share. The total loss on the sale of treasury stock is $4,000 (1,000 shares x $4 per share). The correct journal entry is:Cash 40,000Loss on sale of treasury stock 4,000Treasury Stock 44,000

Which of the Following Entries Would Be Recorded When a Company