The Vernon Corporation was formed on January 2, 2014. The company sold 20,000 shares of $8.00 par value stock for $20.00 per share. On July 1, 2014, Vernon bought back 4,000 shares of stock for $24.00 per share. The treasury stock was resold on September 1, 2014 for $32.00 per share.
Which one of the following is the correct entry to record the sale of treasury stock?
| A.
DR Cash 128,000
CR Common stock 128,000
|
| B.
DR Cash 128,000
CR Treasury stock 96,000
CR Paid in capital in excess of par 32,000
|
| C.
DR Cash 128,000
CR Treasury stock 96,000
CR Gain on sale of treasury stock 32,000
|
| D.
DR Cash 128,000
CR Treasury stock 96,000
CR Retained earnings 32,000
|