The House company was organized on July 1, 1985. On December 15, of the current

Question

The House company was organized on July 1, 1985. On December 15, of the current year, it repurchased 100,000 shares of its outstanding common stock. At the time of repurchase the stock has a par-value of $50. The repurchase price was $53 per share. If House Company uses the cost method in accounting for treasury stock reporting the journal entry to record this event would be:Question 2 options:
a. (dr)Retained Earnings $5,300,000
(cr)Cash $5,300,000

b. (dr)Treasury Stock $5,300,000
(cr)Cash $5,300,000

c. (dr)Treasury Stock $5,000,000
(dr)A.P.I.C.-Treasury stock $300,000
(cr)Cash $5,300,000

d. (dr)Retained Earnings $300,000
(dr)Treasury Stock $5,000,000
(cr)Cash $5,300,000

Explanation / Answer

Dec 15 Treasury Stock(100,000*$53/sh) 5,300,000 debit Cash 5,300,000 credit b.

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