value 1.00 points MC Qu81 Melrose Inc. buys back... Melrose Inc. buys back 303,0

Question

value 1.00 points MC Qu81 Melrose Inc. buys back... Melrose Inc. buys back 303,000 shares of its stock from investors at $800 a share. Two years later, it reissues this stock for $7.50 a share. The stock reissue would be recorded with a debit to Cash for ?S2 272 500 milion, a debit to Additional Padin Capital for $151.500, and a credit to Treasury Stock for $2.424,000 mition O $2-424000 miltion a credit to Treasury Stock for $2.272.500 milion, and a credit to Additionel Paid-in Capital for $151.500 O $2.424000 mition and a credit to Treasury Stock for $2 424000 million. O $2272 500 milion and a credit to Treesury Stock tor $2272.500 References Multiple Choice back /2 13 f4 [5 f6

Explanation / Answer

Journal entry when the stock is reissued :

The answer is - $2,272,500 million, a debit to Additional Paid in capital for $151,500 and a credit to Treasury Stock for $2,424,000 million.

Cash (303,000*7.5) 2,272,500 Additional paid in capital - Treasury stock (plug) 151,500 Treasury stock (303,000*8) 2,424,000

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