I need help in this question Question 4 (of 9) Anthem Inc Issues 200,000 shares

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I need help in this question

Question 4 (of 9) Anthem Inc Issues 200,000 shares of stock with a par value of $0 07 for $156 per share. Three years later. it Anthem Inc iss repurchases these shares for $86 per share. Anthem records the repurchase in which of the following ways? O Debit Common Stock for $14.000, deblt Additional Paid-in Captal for $17.186.000 and credt Cash for $1720 million O Debit Common Stock for $14,000, debit Additional Paid-in Capital for $31,186.000 and credit Cosh for $31.20 O Debit Treasury Stock for $17.20 miltion and credit Cash for $17.20 million. O Debit Stockhoiders' Equity for $3120 miltion, credit Additional Paid-in Capital for $1720 millian and credit Cash for $17 20 million

Explanation / Answer

Answer:

3) The answer will be : Debit Treasury stock for $17.20 million nad Credit cash for $17.20 million,

As all the amount of buy-back of the shares is debited in Treasurey stock and correspondingly cash is credited for the same amount. These shares will either be sold again to any other investor or will be retired by the company after some time.

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