On August 1,2014,B.Amherst Company reacquired 4,000 shares of its $15 par value common stock for $18 per share.Amherst uses the cost method to account for treasury stock.What journal entry should Amherst make to record the acquisition of treasury stock?

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Amherst uses the cost method to account for treasury stock, which means that the treasury stock is recorded at cost. The journal entry to record the acquisition of treasury stock is to debit Treasury Stock for the cost of the shares repurchased ($72,000 in this case) and credit Cash for the same amount. Therefore, the correct choice is D. Choice A is incorrect because it includes an entry to additional paid-in capital, which is not used in the cost method of accounting for treasury stock. Choice B is incorrect because it includes an entry to retained earnings, which is also not used in the cost method. Choice C is incorrect because it records the transaction incorrectly as a decrease in retained earnings, which would only be appropriate if the treasury stock was retired, not simply reacquired.