Question

Refurbish, Inc. bought 1,000 shares of its own stock for $8,000. Later, it resold the shares for $10,000. The journal entry to record the sale of treasury stock includes a(n) ______

Answer 1

Answer:

Journal entry to record sale of treasury stock

• Dr Cash account 10,000
• Cr Treasury Stock account 8,000
• Cr Additional Paid-in Capital account 2,000

Explanation:

Cash is an asset account and since it increases, it should be debited.

Treasury stock is an equity account and since it increases, it should be credited.

All the money received above par value, or purchase value in this case, must be recorded in the additional paid-in capital account since transactions regarding the sales or purchases of stock don't generate profits or losses.