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

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

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

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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 ...

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