Vaughn Manufacturing purchased its own par value stock on January 1, 2020 for $18900 and debited the treasury stock account for the purchase price. The stock was subsequently sold for $11100. The $7800 difference between the cost and sales price should be recorded as a

deduction from retained earnings.

net income.

additional paid-in capital without regard as to whether or not there have been previous net "gains" from sales of the same class of stock included therein.

additional paid-in capital to the extent that previous net "gains" from sales of the same class of stock are included therein; otherwise, from retained earnings.