J&C Corporation purchased for the treasury 1,000 shares of its own $1 par value common stock at $20 per share.This was the first time the company had ever purchased treasury stock.Shortly thereafter,J&C sold 400 shares of this treasury stock at $17 per share.The journal entry to record the sale of the treasury stock would include a:

Question

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The sale of treasury stock at a price lower than its cost results in a loss. The difference between the cost ($20 per share) and the sale price ($17 per share) for 400 shares is $1,200, which is debited to Retained Earnings.

J&C Corporation Purchased for the Treasury 1,000 Shares of Its