Prior to June 30, a Company Has Never Had Any

Multiple Choice

Prior to June 30, a company has never had any treasury stock transactions. A company repurchased 100 shares of its $1 par common stock on June 30 for $40 per share. On July 20, it reissued 50 of these shares at $46 per share. On August 1, it reissued 20 of the shares at $38 per share. What is the journal entry necessary to record the repurchase of stock on June 30 using the cost method?

A) Debit Common Stock $4,000; credit Cash $4,000.
B) Debit Common Stock $100; debit Treasury Stock $3,900; credit Cash $4,000.
C) Debit Treasury Stock $3,900; debit Paid-in Capital, Treasury Stock $100; credit Cash $4,000.
D) Debit Treasury Stock, Common $4,000; credit Cash $4,000.
E) Debit Cash $4,000; credit Treasury Stock $4,000.