8. Prost Products has excelled onpast treasury stock transactions, selling the s

Question

8. Prost Products has excelled onpast treasury stock transactions, selling the stock at above cost resulting in a balance ofS1,250 in Paid in Capital from Treasury Stock account. Currently, the company is holding 460 shares ofits $2 par-value common stock, reacquired for $2,000. If the stock is reissued for $500, what joumal entry wil the company's accountant make? a. Cash 500 Treasury Stock 500 Cash Loss on Treasury Stock 500 1,500 Treasury Stock 2,000 500 Cash Paid-in Capital from Treasury Stock C. Treasury Stock 2,000 500 1,250 250 d. Cash Paid-in Capital from Treasury Stock RetainedEamings Treasury Stock 2,000 9. The following joumal entry was found in the accountingrecords of the Sullivan Corp RetainedEamings 10,000 Dividends payable 10,000 On what date would the entry have beenmade? a. Date of declaration. Date ofrecord. Ex-dividend date Date ofpayment. C. d.

Explanation / Answer

Journal entry for reissued :

so answer is d)

9) When dividend is declared then journal entry would be retained earnings debit to dividend payable so in above question this entry is made on date of declaration.

so answer is a) Date of declaration

Date accounts & explanation debit credit Cash 500 Paid in capital from sale of treasury stock 1250 Retained earnings 250 Treasury stock 2000 (To record reissue treasury stock)

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