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Find the correct entry to record the sale of treasury stock

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Reference no: EM131787605

The Vernon Corporation was formed on January 2, 2014. The company sold 20,000 shares of $8.00 par value stock for $20.00 per share. On July 1, 2014, Vernon bought back 4,000 shares of stock for $24.00 per share. The treasury stock was resold on September 1, 2014 for $32.00 per share.

Which one of the following is the correct entry to record the sale of treasury stock?

A.

DR  Cash                        128,000
       CR Common stock                  128,000
B.

DR  Cash                                        128,000
       CR Treasury stock                                   96,000
       CR Paid in capital in excess of par                     32,000
C.

DR  Cash                                            128,000
       CR Treasury stock                                        96,000
       CR Gain on sale of treasury stock                            32,000
D.

DR  Cash                      128,000
       CR Treasury stock              96,000
       CR Retained earnings                    32,000

 

 

Reference no: EM131787605

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