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 shares includes a debit to Cash for the amount received ($20 x 2,000 = $40,000), a credit to Treasury Stock for the cost of the shares ($18 x 2,000 = $36,000), and a credit to Paid-in Capital from Treasury Stock for the difference between the cost and sale price of the shares (($20 - $18) x 2,000 = $4,000). Therefore, the correct entry is:

Cash                                     $40,000
Treasury Stock                    $36,000
Paid-in Capital from Treasury Stock         $4,000

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