A company paid $20 per share to purchase 500 shares of its common stock as treasury stock. The stock was originally issued at $16 per share. The journal entry to record the purchase of the treasury stock is ______.
a. debit Common Stock $10,000; credit Cash $10,000
b. debit Treasury Stock $10,000; credit Cash $10,000
c. debit Treasury Stock $5,000 and Paid-in Capital in Excess of Par $5,000; credit Cash $10,000
d. debit Treasury Stock $8,000 and Retained Earnings $2,000; credit Cash $10,000
e. debit Treasury Stock $8,000; credit Cash $8,000
Answer: b. debit Treasury Stock $10,000; credit Cash $10,000
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a. True b. False
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