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Rick Co. purchases 8,500 shares of the company's $6 par common stock for $8 per share....

Rick Co. purchases 8,500 shares of the company's $6 par common stock for $8 per share. Journalize the transaction.

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Answer #1
Account titles Debit Credit
Treasury Stock $     68,000
Cash $     68,000
(To repurchase own shares)
Working:
Amount to be paid = Number of shares * buying cost per share
= 8500*$8
= $     68,000
When compay buying its own shares they are called treasury stock.
It is shown in balance sheet in owner's equity part.but, in negative form.
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