On December 2, ABC Company acquired 1,300 shares of its $3 par value common stock for $25 each. On December 20, ABC Company resold 900 shares for $13 each. Which of the following is correct regarding the journal entry for the resold shares? a. Credit Additional Paid-in Capital $7,000
b. Credit Treasury Stock $20,000
c. Debit Cash $15,400
d. Credit Treasury Stock $11,000

There is no correct statement regarding the journal entry for the resold shares.

Debit Cash $11,700 ($13 * 900)

Credit Treasury $2,700 ($3 * 900)

Credit APIC $9,000 ($10 * 900)

Explanation:

a) Data and Calculations:

Dec. 2 Repurchased 1,300 shares of its $3 par at $25 each = $32,500 (Cash is credited).  Treasury stock is debited with $3,900 while APIC (Additional Paid-in Capital) is debited with $28,600.

Dec. 20, Resold 900 shares of $3 par at $13 each = $11,700 (Cash is debited).  Treasury Stock is credited with $2,700 while APIC is credited with $9,000.  The above transactions are recorded as indicated when using the par value approach.  Since none of the options agrees with the above treatment, there is no correct statement.

b, fewer problems later! good luck