On January 1,2010,Belmont Corporation had 50,000 shares of $10 par value common stock issued and outstanding.All 50,000 shares had been issued in a prior period at $15 per share.On February 1,2010,Belmont purchased 2,000 shares of treasury stock for $18 per share and later sold the treasury shares for $20 per share on March 2,2010.The entry to record the sale of the treasury shares on March 2,2010,would be:

Question

Quizplus · Accepted Answer

The entry to record the sale of treasury stock includes debiting Cash for the proceeds received ($20 x 2,000 = $40,000), crediting Treasury Stock for the cost of the shares ($18 x 2,000 = $36,000), and recording the difference between the proceeds and the cost as a gain in Additional Paid-in Capital ($4,000 = $40,000 - $36,000). Therefore, the correct entry is: 
Cash            $40,000
Treasury Stock        $36,000
Additional Paid-in Capital       $4,000

On January 1,2010,Belmont Corporation Had 50,000 Shares of $10 Par Cash 40,000 Treasury Stock-Common40,000\begin{array}{l}\text { Cash }&40,000\\\text { Treasury Stock-Common}&&40,000\end{array} Cash Treasury Stock-Common​40,000​40,000​

On January 1,2010,Belmont Corporation Had 50,000 Shares of $10 Par $\begin{array}{l}\text { Cash }&40,000\\\text { Treasury Stock-Common}&&40,000\end{array}$