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On March 4, 2019, Orpheus Inc. purchased 2,100 shares of its own $10 par value common stock in the market for $32 per share. On August 19, 2019, the company sold 1,600 of these shares in the open market at a price of $36 per share. The entry to record the purchase of the treasury stock on March 4, 2019 is:________.
A.
Dr. Treasury Stock 67,200
Cr. Retained Earnings 67,200
B.
Dr. Common Stock 21,0001
Cr. Cash 21,0001
C.
Dr. Treasury Stock 67,200
Cr. Cash 672001
D.
Dr. Common Stock 21,000
Dr. Treasury Stock 46,200
Cr. Cash 67,200

Respuesta :

sadddamkashmiri801

Answer:

Option C

Dr. Treasury Stock 67,200

Cr. Cash 67200

Explanation:

Before March 4, 2019

The reason is that when the stock was issued the entry was:

Dr Cash $67200

Cr Common Stock $67200 ... 2100 * $32 per share

On March 4, 2019

So if the 1600 out of 2100 are repurchased then the above entry would be reversed but here their is a small difference which is that the term common stock would not be used and instead we will use Treasury Stock because this is the term that is used when the common stock is decreased by repurchase of shares.

Dr Treasury Stock $67,200

Cr Cash                          $67,200

So the right answer is option D.

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