We debit-- Capital stock $150,000 We credit-- John Doe $100,000 Richard Roe 25,000 Henry Snow 25,000 When the $50,000 stock is donated to the treasury to provide working capital-- We debit John Doe 50,000 We credit Treasury stock 50,000 and open an account with treasury stock in the stock ledger. When treasury stock is sold-- We debit Treasury stock 30,000 We credit Subscribers 30,000 When a stockholder sells a part or all of his shares to another it has no effect on capital stock or treasury stock accounts in the stock ledger. The only change takes place in the accounts of the individual stockholders involved. The stock transferred is debited to the account of the _transferor_, and credited to the account of the _transferee_. Supposing that $30,000 treasury stock was purchased by Henry Benson, George Dennis, and Richard Carpenter, each purchasing $10,000, the stock ledger and stock register--if one is used--would appear as shown in the illustration. Footing the two sides of the stock register we find a balance of 1,300 shares which is the actual amount outstanding, the balance of 200 shares remaining in the treasury. A trial balance also shows that the stock ledger balances with a credit of $20,000 treasury stock. [Illustration: Stock Ledger] [Illustration: Stock Ledger] [Illustration: AIR-LINE CASH-CARRYING SYSTEM FOR LARGE RETAIL DRUG STORE Applicable to a Moderate-Sized General Store. Lamson Consolidated Store Service Co.] [Illustration: Stock Register] EXERCISES 1. A corporation is organized with a capital of $50,000.00, divided into 500 shares of $100.00 each. The corporation begins business when 250 shares have been subscribed for. Of this amount _A_ subscribes for 100 shares, _B_ for 100 shares, and _C_ for 50 shares. These shares are paid for in cash within 30 days after the date of subscriptions. Six months later the balance of the stock is subscribed for, subscriptions being received from _A_ for 50 shares, _B_, 50 shares, _D_, 100 shares, and _E_, 50 shares. _C_ sells 50 shares to _B_. These new shares are paid for in cash. Make all entries in general books. Make all entries in stock books. 2. _A_, _B_, and _C_ organize a corporation with an authorized capitalization of $100,000.00, divided into 1,000 shares of $100.00 each. _A_ subscribes for 400 shares, _B_, 300 shares, and _C_, 200 shares. The corporation buys from _D_ land and buildings for $20,000.00, paying him $10,000.00 in cash and issuing to him 100 shares of stock. Subscriptions are paid as follows: _A_ pays $20,000.00 cash and gives his note due in 60 days for $20,000.00; _B_ pays $20,000.00 cash and gives his note for $10,000.00 payable in 30 days; _C_ pays $10,000.00 cash and gives his note for $10,000.00 payable in 10 days.