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Entry 1

On March 1, 2017, the company purchased 10,000 shares of $5 par value stock that it had previously issued. It purchased the stock for $10 per share. You would record the following transaction:

Calculations:

• $\text{treasury stock }= 10,\mathrm{000\; }\text{shares }\times \mathrm{\$10 }\text{cost (original purchase price) }= \mathrm{\$100}\text{,000}$

Entry 2

On April 1, 2017, the company sold 5,000 shares of the treasury stock purchased on March 1 for $15 per share.

Calculations:

• $\text{cash}=\; 5,\mathrm{000 }\text{shares}\times \mathrm{\$15 }\text{selling price}=\mathrm{\$75}\text{,000}$
• $\text{treasury stock}=\; 5,\mathrm{000 }\text{shares}\times \mathrm{\$10 }\mathrm{}\text{cost (original purchase price)}=\mathrm{\$50}\text{,000}$
• $\text{paid-in capital in excess from treasury stock}=\; 5,\mathrm{000 }\text{shares}\times (\mathrm{\$15}\text{-\$10)}=\mathrm{\$25}\text{,000}$

You would not record a gain or loss on the sale of treasury stock.
In this transaction, the company made money; it bought the shares for $10 and sold them for $15.
The excess received over the original cost is credited to paid-in capital from treasury stock

Entry 3

On May 1, 2017, the company sold 5,000 shares of the treasury stock purchased on March 1 for $9 per share.

Calculations:

• $\text{cash}=\; 5,\mathrm{000 }\text{shares}\times \mathrm{\$9 }\text{selling price}=\mathrm{\$45}\text{,000}$
• $\text{treasury stock}=\; 5,\mathrm{000 }\text{shares}\times \mathrm{\$10 }\mathrm{}\text{cost (original purchase price)}=\mathrm{\$50}\text{,000}$
• $\text{paid-in capital from treasury stock}=\; 5,\mathrm{000 }\text{shares}\times (\mathrm{\$10}\text{-\$9) =}\mathrm{\$5}\text{,000}$

In this transaction, the company lost money; it bought the shares for $10 and sold them for $9.
The excess of the original cost over the amount received is debited to paid-in capital from treasury stock.