Use the following information to answer the question below. The following transactions involving Lupine Corporation occurred during the year: Apr. 1 Purchased 2,000 shares of its own preferred stock for $20, the current market price. This is the first transaction involving its own stock engaged in by the company. May 3 Sold 400 of the shares purchased on April 1 for $25 per share. June 5 Retired
600 of the shares purchased on April 1 . The original issue price was $10 . The par value of the stock is $5. The entry to record the May 3 transaction would be:
a. Treasury Stock, Preferred 10,000
Cash 10,000
b. Cash 10,000
Treasury Stock, Preferred 8,000
Paid-in Capital, Treasury Stock 2,000
c. Cash 4,000
Retained Earnings 6,000
Treasury Stock, Preferred 10,000
d. Treasury Stock, Preferred 8,000
Cash 8,000
B
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