Question

alifornia Surf Clothing Company issues 1,000 shares of $1 par value common stock at $32 per share. Later in the year, the company decides to purchase 100 shares at a cost of $35 per share. Record the purchase of treasury stock.

Answer 1

• Record the purchase of treasury stock.

Treasury Stock $3,500 - CREDIT

Cash $3,500 - DEBIT

Step-by-step explanation:

If the company purchase the shares and keep it in the company the journal entry it's as detailled, in this case the company keep the shares in the accounting and the shares could be reissued in the future.

The total shares purchases are 100 * $35 = $3,500.