Problem: The fair value of Canfield Company's common stock was $34 per share on December 31, 2013 and $45 per share on December 31, 2014. Canfield acquired 5,000 shares of its own common stock at $38 per share on March 10, 2014, and sold 4,000 of these shares at $42 per share on September 25, 2014. Canfield Company uses the cost method to account for treasury stock. The journal entry to record the sale of the treasury stock should credit
1) Treasury Stock for $152,000 and Retained Earnings for $16,000
2) Treasury Stock for $190,000 and Retained Earnings for $20,000
3) Treasury Stock for $152,000 and Paid-in Capital from Treasury Stock for $16,000
4) Treasury Stock for $168,000