When the common stock is reacquired at cost higher than issue cost requires a Debit to Loss on Repurchase of Common Shares. Option B is correct. This done when Par Value method is used. Journal Entry for reacquisition of Common Shares in above case will be :- Account Titles and Explaination Treasury Stock Loss on Repurchase of Common Shares Cash Debit (S) Par Value based on Avg. issued price Excess Paid to reacquire over and above par value Credit(S) Total Amount Paid to reacquire shares Explanation is written in Debit and Credit Coloums to understood what values are written Now, Also note in the case when shares were initially issued at price higher than par value. Then, instead of using "Loss on Repurchase of Common Shares" Account, we will use credit balance of "Addition Paid-in-Capital". It will be debited instead of "Loss on Repurchase of Common Shares". Hope you Understood the concept, if any query feel free to ask in comment section.