When a corporation reacquires its own shares of stock,

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When a corporation reacquires its own shares of stock, the Treasury Stock account is debited for the price paid to reacquire the shares. This is because the cost paid to reacquire the shares is the price that the corporation will record in its accounting records to reflect the reduction in outstanding stockholders' equity. The par value and original issue price are irrelevant in this transaction. The current market value of the shares may be used as a reference for deciding the price to pay in the reacquisition, but it is not directly used to record the transaction.

When a Corporation Reacquires Its Own Shares of Stock