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HMS Ghost issuance of treasury shares

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In 2006, HMS Ghost Corp. acquired 9,000 shares of its own $1 par value common stock at $18 per share. In 2007, HMS Ghost issued 4,000 of these shares at $25 per share. HMS Ghost uses the cost method to account for its treasury stock transactions. What accounts and what amounts should HMS Ghost credit in 2007 to record the issuance of the 4,000 shares?

Treasury Additional Retained Common
Stock Paid-in-Capital Earnings Stock

$_______ $______________ $___________ $____________

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Solution Summary

The solution gives a step-by-step explanation of what amounts and accounts are affected on the sale of treasury stock.

Solution Preview

Using the cost method for treasury stock will only affect the treasury stock account and the paid in capital ...

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