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Resale of Treasury Stock at a Loss
Selling company-owned shares back to the market for less than what they were bought for.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Cash | Asset (+) | 4,000.00 | - |
| Retained Earnings (or APIC-TS) | Equity (-) | 1,000.00 | - |
| Treasury Stock (at cost) | Contra-Equity (-) | - | 5,000.00 |
💡 Accountant's Note
If you sell treasury stock at a loss, you first reduce any existing 'Paid-in Capital from Treasury Stock'. If that's zero, you reduce Retained Earnings. You never record a loss on the Income Statement.
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