California Surf Clothing Company issues 1,000 shares of $1 par value common stock at $20 per share. Later in the year, the company decides to Purchase 100 shares at a cost of $23 per share. Record the transaction if California Surf resells the 100 shares of treasury stock at $25 per share. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

Dr. Cash                                           $2,500

Cr. Treasury Shares                        $2,300

Cr. Paid-In-Capital Treasury Stock $200

Explanation:

Treasury stock is the share of the company issued earlier and bought-back. It can be reissued and cancelled by the company.

At the time of repurchase

Treasury Shares = 100 x $23 = $2,300

Dr. Treasury Stock $2,300

Cr. Cash                  $2,300

At the time of Resale

All the difference in the issuance of treasury stock will be transferred to Paid-In-Capital Treasury Stock account.

Proceeds = 100 x $25 = $93,600

Paid-In-Capital Treasury Stock = $2,500 - $2,300 = $200