Question

Olympus Co. issued 100,000 shares of $10 par common stock for $1,200,000. A year later Olympus acquired 16,000 shares of its own common stock at $15 per share. Three months later Olympus sold 8,000 of these shares at $19 per share. If the cost method is used to record treasury stock transactions, to record the sale of the 8,000 treasury shares, Olympus should credit

Question 4 options:

	Treasury Stock for $120,000 and Paid-in Capital in Excess of Par for $32,000.
	Treasury Stock for $80,000 and Paid-in Capital from Treasury Stock for $72,000.
	Treasury Stock for $152,000.
	Treasury Stock for $120,000 and Paid-in Capital from Treasury Stock for $32,000.

Answer 1

Journal entry to record at the time of sale using Cost method

No.	Account titles and explanation	Debit	Credit
a.	Cash (8000*$19)	$152000
	Treasury stock (8000*$15)		$120000
	Paid-in Capital from Treasury Stock (152000-120000)		$32000
	(To record treasury stock sold)

Olympus should credit Treasury stock for $120000 and Paid-in Capital from Treasury Stock for $32000

So, the answer is option D) Treasury Stock for $120000 and Paid-in Capital from Treasury Stock for $32000

NOTE; - Please rate the answer and for any problem regarding the answer please ask in the comment section.