Hi I need some help on this question. Prepare in journal form the following entries.
1 Oct 1 Purchased 1,000 shares of it's own $2 par value common stock for $20 per share, the current market price
2. Sold 250 shares of treasury stock purchased on Oct 1 for $25 per share.
3. Sold 400 shares of treasury stock purchased on october 1 for $18 per share.

heres my answers please help me if I did them wrong.
1. Treasury stock, common 20,000
cash 20,000
2 Cash 6,250
treasury stock, common 4,800
PIC 1,450
3. Cash7,200
PIC
Retained earning
Treasury stock common 8,000

As you can see I am having a hard time on #3 please someone help me on what I did wrong!! Thanks

bhet

#3
dr. cash 7200
dr. PIC-treasury stock 800
Cr. treasuy stock 8000

since in the second transaction, you have a balace of PIC - TS (treasury stock) it will absorb any losses on transactions involoving TS. If the PIC - TS balance is already zero, that is the time that we would debit Retaines earnings.