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Journalizing treaury stock transactions

How do you journalize treasury stock transactions?

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Solution Preview

There could be various situations in relation to treasury stock transactions. We will see them one by one.

1. Purchase of treasury stock - Purchased 100 shares at $20
Entry is
Treasury Stock Dr... 2,000
Cash Cr....................... 2,000

2. Sold Treasury stock - sold 50 at $22
Entry is
Cash Dr...1,100
Treasury Stock Cr....1,000 ( the credit amount is always at the purchase price- 50X20)
Additional paid in capital from treasury stock Cr..100 ( the difference goes here)

3. Sold ...

Solution Summary

The solution explains how to record treasury stock transactions.