Dallas Corporation purchased 300 shares of its own $10 par value common stock for $7,500. Later, these shares are sold for $8,000 cash. The journal entry to record the sale includes a:

Question

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The cost of the treasury stock is $7,500, and it was sold for $8,000, resulting in a $500 excess over cost. This excess is credited to Paid-in Capital from Treasury Stock because gains on treasury stock transactions are not recognized as income but rather as an addition to equity.

Dallas Corporation Purchased 300 Shares of Its Own $10 Par