Question

The Americans Inc. has 10,000 shares of treasury stock that they purchased on December 1, 2017, for $20 per share. They also have Additional Paid-in-Capital, Treasury Stock, amounting to $5,000 from prior treasury stock transactions. On December 19, 2017, The Americans decided to sell for $18 per share, 5,000 shares of the treasury stock purchased on December 1.   The journal entry to record the sale on December 19, 2017, would include a debit to the loss on the sale of treasury stock account for $10,000 a debit to the additional paid-in-capital, treasury stock, account for $5,000 a debit to the additional paid-in-capital, treasury stock, account for $10,000 a credit to the treasury stock account for $90,000

Answer 1

Ans: debit to the additional paid-in-capital, treasury stock, account for $10,000

Solu:

          Journal entry would be as follows:

              Cash A/c                  90000

             additional paid-in-capital A/c       10000

                      treasury stock                            100000

          (being treasury stock sold at a discount)