When a company fully depletes the credit balance in Paid$-$in Capital, from Treasury Stock, it debits to Retained Earnings any additional excess of cost over selling price. To illustrate, assume that Mead, Inc. sells its remaining $2,200-$shares at $$7$ per share on December $1.$ The excess of cost over selling price is $$2,200[2,200$ x $($$$8-$ $$7)].$ In this case, Mead debits $$1,200$ of the excess to Paid$-$in Capital from Treasury Stock. It debits the remainder to Retained Earnings. The entry is as follows.