On January 1,2013,Belmont Corporation had 50,000 shares of $10 par value common stock issued and outstanding.All 50,000 shares had been issued in a prior period at $15 per share.On February 1,2013,Belmont purchased 2,000 shares of treasury stock for $18 per share and later sold the treasury shares for $20 per share on March 2,2013.The entry to record the purchase of the treasury shares on February 1,2013,would be:

Question

Quizplus · Accepted Answer

The purchase of treasury stock is recorded at cost, so the entry would debit Treasury Stock for the total cost of the shares (2,000 shares x $18 per share = $36,000) and credit Cash for the same amount.

On January 1,2013,Belmont Corporation Had 50,000 Shares of $10 Par