Question

On January 1, Vermont Corporation had 48,400 shares of $9 par value common stock issued and outstanding. All 48,400 shares had been issued in a prior period at $22 per share. On February 1, Vermont purchased 910 shares of treasury stock for $24 per share and later sold the treasury shares for $18 per share on March 1. The journal entry to record the purchase of the treasury shares on February 1 would include a

Answer 1

Debit to Treasury Stock for $21,840

Step-by-step explanation:

Cost = Number of Stock * Cost per Stock

Cost = 910 shares * $24

Cost = $21,840

Date Accounts Debit Credit

Feb 1 Treasury Stock $21,840

Cash $21,840

Note: When company reacquire its outstanding shares and not retire, it is called treasury stock.