Question

Use this information for #24 and #25. The following transactions occurred during the year April 1- Purchased 2,000 shares of its own $10 par value, common stock for $20 per share. This is the first time the corporation ever purchased their own stock. May 3 -Sold 400 of the shares purchased on April 1 for $25 per share 24. The entry to record the April 1st transaction is: a. DR Treasury Stock $20,000 CR Cash $20,000 b. DR Treasury Stock $20,000 CR Paid in Cap Treasury Stock Transact $20,000 CR Cash $40,000 c. DR Treasury Stock $40,000 CR Cash $40,000 d. DR Common Stock $40,000 CR Cash $40,000 25. The entry to record the May 3rd transaction is: a. DR Cash $10,000 CR Treasury Stock $10,000 b. DR Retained earnings $10,000 CR Cash $10,000 c. DR Cash $ 10,000 CR Treasury Stock $10,000 d. DR Cash $10,000 CR Treasury Stock $8,000 CR Paid in Capital Treasury Stock Transactions $2,000

Answer 1

24 Ans:

Option C- Dr Treasury stock $40,000 Cr Cash $40,000

25 Ans:

Option D - Dr Cash $10,000 Cr Treasury stock $8,000 Cr Paid in Capital treasury stock $2,000

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