Explore BrainMass
Share

Briefly explain the cost method and the par (stated value) m

This content was STOLEN from BrainMass.com - View the original, and get the solution, here!

Briefly explain the cost method and the par (stated value) method of accounting for treasury stock, with examples.

© BrainMass Inc. brainmass.com September 22, 2018, 11:41 am ad1c9bdddf - https://brainmass.com/business/financial-accounting-bookkeeping/briefly-explain-cost-method-par-stated-value-413137

Solution Preview

Briefly explain the cost method and the par (stated value) method of accounting for treasury stock, with examples.

Under the cost method of accounting for treasury stock, the cost of the shares of stock is debited to the treasury stock account.

Example:
50 shares of stock are acquired at $40 each. 50 * 40 = 2,000

The journal entry would appear as follows, to illustrate how the cost method works:
Treasury stock ...

Solution Summary

The expert briefly explain the cost method and the par (stated value) method of accounting for treasury stock, with examples.

$2.19