Treasury shares purchased for $25 per share that are reissued at $20 per share, result in a Loss on Sale of Treasury Shares being recognized on the income statement.

Question

Quizplus · Accepted Answer

Since the reissued price of $20 is lower than the purchase price of $25, the company is actually selling the shares at a loss. However, the loss is recognized on the balance sheet as a reduction in equity rather than on the income statement.

Treasury Shares Purchased for $25 Per Share That Are Reissued