QUESTION 1

1. Use the following information to answer questions 1-4.
2. The Stockholders' Equity accounts of a corporation on January 1, 2015, were as follows:
4. PreferredStock (5%, $10 par, cumulative, 5,000 sharesauthorized)$35,000
5. CommonStock ($5 par, 500,000 sharesauthorized)750,000
6. Additional Paid in Capital -Preferred205,800
7. Additional Paid inCapital -Common2,220,000
8. RetainedEarnings857,000
10. During 2015, the corporation had the following transactions and events relating to its stockholders equity.
12. Jan.2Purchased 2,500 shares of its own common stock to add to the Treasury at a cost of $53,750.
13. Feb.21Issued 10,000 shares of common stock in exchange for a building.On the date of the exchange, the FMV of the building was $212,000 and the stock was trading at $20.25 per share.
14. Mar.21Sold 1,000 shares of treasury stock - common for $24 per share.
15. Nov.14Issued 500 shares of preferred stock for $36,000.
16. Dec.31Determined that net income for the year was $226,000.Dividends were declared and paid during December.These dividends included a $0.20 per share dividend to common stockholders of record as of December 20.There are no dividends in arrears.

Using the information from above...

2. The journal entry to record the March 21^stsale of Treasury Stock would include a:

A.credit to Treasury Stock of $21,500

B.debit to Additional Paid in Capital - Treasury Stock of $2,500

C.credit to Treasury Stock of $24,000

D.debit to Common Stock of $21,500

E.credit to Additional Paid in Capital - Treasury Stock of $3,000