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Journalizing treaury stock transactions

How do you journalize treasury stock transactions?

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.

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