When O'Rourke Corporation sells treasury stock for more than the original cost:

Question

Quizplus · Accepted Answer

Treasury stock is stock that has been bought back by the company and is being held as an asset. When it is sold again, the company will receive a higher price than they originally paid for it, creating a gain on the sale. This gain is recorded in the paid-in capital portion of stockholders' equity because it represents money coming in from outside sources (investors buying the stock) rather than from the company's operations.

When O'Rourke Corporation Sells Treasury Stock for More Than the Original