Question

The company re-purchased 10,000 common stocks issued originally at a price of $12, with a par...

The company re-purchased 10,000 common stocks issued originally at a price of $12, with a par value of $10, at a cost of $15.00. Assume these stocks will be sold within the next 6 months

Journal Entry

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Answer #1

Number of shares purchased = 10,000

Cost price of 1 share = $15

Total cost of treasury share =  Number of shares purchased x Cost price of 1 share

= 10,000 x 15

= $150,000

The journal entry to purchase share will be :

Journal

Account Title and Explanation

Debit

Credit
Treasury stock 150,000
Cash 150,000
(To record purchase of treasury stock)

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