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Question
On January 1, Vermont Corporation had 40,000 shares of $10 par value common stock issued and outstanding. All 40,000 shares had been issued in a prior period at $20 per share. On February 1, Vermont purchased 3,750 shares of treasury stock for $24 per share and later sold the treasury shares for $21 per share on March 1.
The journal entry for the purchase of the treasury shares on February 1 would include a
a. credit to Treasury Stock for $90,000
b. debit to Treasury Stock for $90,000
c. debit to a loss account for $112,500
d. credit to a gain account for $112,500
Answer
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