A company reacquired 1,000 shares of its $50 par value common stock as treasury They were purchased

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Question:

A company reacquired 1,000 shares of its $50 par value common stock as treasury They were purchased last year at a cost of $400,000. In October of this year, the company sold 500 of the shares for $180,000. Assuming that it uses the cost method of accounting for treasury stock and has a credit balance of $15,000 in its additional paid-in capital from treasury stock transactions account, this sale should result in a

Debit to treasury stock of $180,000.

Debit to retained earnings of $5,000.

Credit to treasury stock of $180,000.

Debit to additional paid-in capital of $20,000