I'm looking over this illustration and I don't get why would PIC TS would be there.

UC Company originally issued 15,000 shares of $1 par, common stock for $25 per share. Record the journal entry for the following transaction:
June 1st Sold 500 shares of its Treasury Stock for $30 per share.

Cash (500 x $30)=======15,000
=======Treasury stock (500 x $28)=======14,000
=======Paid-in capital treasury stock======1,000



UC Company originally issued 15,000 shares of $1 par, common stock for $25 per share. Record the journal entry for the following transaction:
Oct. 15th Sold 300 shares of its Treasury Stock for $9 per share.

Cash (300 x $9)================2,700
===Treasury stock (300 x 28)===============8400
Paid in capital treasury stock ===1000 <----????
R.E. ========================4700

tonie

help?

morgaine300

You need to learn to be patient. Everyone here is volunteers and have lives outside of this place. People answers questions when they have the time.

The treasury stock has to be removed from the account at the same amount it went in for. Apparently the company purchased it at $28, but I don't know where they got that information from. If they re-sell it for higher, the "extra" they get is additional paid-in capital (in this case, from the sale of treasury stock). If they sell it for lower than they paid (i.e. less than $28), that difference still has to go some place. If there is anything already in the PIC T/S account, it is taken back out, to the extent of what is in there. i.e. There's only $1000 in there, so only $1000 can be taken back out. (The $1000 is from the prior entry and apparently there is nothing else in there. But again, I don't know where this information is actually coming from, because it is not presented in the problem. I'm only picking up what I see in the answer.)

tonie

I don't have problem being patient but this is summer course and I need help ASAP. BTW, I didn't read your entire post just the first sentence but I already figured out the answer. Thank nonetheless.