Prior to June 30, a company has never had any treasury stock transactions. The company repurchased 120 shares of its $1 par common stock on June 30 for $40 per share. On July 20, it reissued 60 of these shares at $45 per share. On August 1, it reissued 40 of the shares at $39 per share. What is the journal entry necessary to record the reissuance of treasury stock on July 20?

Multiple Choice

• Debit Common Stock $2,700; credit Cash $2,700.

• Debit Common Stock $40; debit Treasury Stock $2,660; credit Cash $2,700.

• Debit Common Stock $2,700; credit Treasury Stock $2,400; credit Paid-In Capital, Treasury Stock $300.

• Debit Cash $2,700; credit Paid-in Capital, Treasury Stock $300; credit Treasury Stock $2,400.

• Debit Cash $2,700; credit Treasury Stock $2,700.