Question

Kylie Jenner Cosmetics now repurchases 50,000 shares of its stock for $25 per share and holds these stocks in treasury. What is the journal entry for this repurchase?

A) Debit Treasury Stock $1,250,000; Credit Cash $1,250,000

B) Debit Treasury Stock $1,250,000; Credit Retained Earnings $1,250,000

C) Debit Common Stock $1,250,000; Credit Cash $1,250,000

D) Debit Treasury Stock $1,250,000; Credit Common Stock $1,250,000

Answer 1

The correct journal entry for Kylie Jenner Cosmetics repurchasing shares of its stock is to Debit Treasury Stock $1,250,000 and Credit Cash $1,250,000.

Step-by-step explanation:

The correct journal entry for Kylie Jenner Cosmetics repurchasing 50,000 shares of its stock for $25 per share and holding them in treasury would be:

A) Debit Treasury Stock $1,250,000; Credit Cash $1,250,000

This entry involves debiting the Treasury Stock account to record the repurchase of the shares, and crediting the Cash account to show the outflow of funds.