TTSS Corporation had 1,000 common shares issued and outstanding (sold at $40 each).It then made its first-ever purchase of treasury stock by buying 200 of its own shares for $50 per share.Assume sufficient retained earnings.The entry to record this purchase using the single-transaction method would include:

Question

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The purchase of treasury stock reduces the number of outstanding shares, thus increasing the ownership percentage of remaining shareholders. The single-transaction method records the transaction by debiting treasury stock for the cost of the shares purchased, and any excess over par value of the stock is recorded in a contra-equity account called "contributed capital from treasury stock transactions". Therefore, the correct entry would be:
dr. Treasury Stock $10,000
cr. Cash $10,000

TTSS Corporation Had 1,000 Common Shares Issued and Outstanding (Sold