Sandier company had no treasury stock transactions. Then, on June 1, the company paid $5,000 to purchase 100 shares common stock on the open market. On July 1, the company sold 50 of these shares at $52 per share. Then, on August 1, the company sold remaining 50 shares at $46 per share. Complete the journal entry for the sale of the treasury stock on July 1.

July 1

Debit : Treasury Stock (50 shares x $52) $2,600

Credit: Cash (50 shares x $52) $2,600

Explanation:

Purchase of Company`s own shares is known as Treasury Stock this purchase is done at cost.

The Sale however is done at the selling prices on the respective sales dates and number of shares. This sale results in Cash increase and Decrease in Treasury Stock as shown above for July 1 Sale.

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