25. The Vernon Corporation was formed on January 2, 2018. The company sold 20,000 shares of...
25. The Vernon Corporation was formed on January 2, 2018. The company sold 20,000 shares of $8.00 par value stock for $20.00 per share. On July 1, 2018, Vernon bought back 4,000 shares of stock for $24.00 per share. The treasury stock was resold on September 1, 2018 for $32.00 per share.
Which one of the following is the entry to record the original
sale of the stock?
A) DR Cash 400,000 CR Common
stock 160,000 CR Paid-in capital in excess of par
240,000
B) DR Cash 400,000 CR Common
stock 240,000 CR Paid-in capital in excess of par
160,000
C) DR Common stock 240,000 DR
Paid-in capital in excess of par 160,000 CR Cash
400,000
D) DR Common stock 160,000 DR
Paid-in capital in excess of par 240,000 CR Cash
400,000
Homework Answers
Journal for original sale of the stock:
Cash a/c...Dr$400,000(20000*20)
To common stock $160,000(20000*8)
To Paid-in capital in excess of par $240,000
Hence the correct option is A.
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25. The Vernon Corporation was formed on January 2, 2018. The
company sold 20,000 shares of...
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answer part C 3
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As you can see here on the bottom right of this question; it
asks: Shares sold at $10 per share
On the right side where it says Treasury stock; shouldn't the
the entries look like this instead:
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answer part C 3
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Resold 50 shares of treasury stock for $25 per share.
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