Llewelyn Company purchased 1,000 shares of its own $10 par value common stock when the market price of the stock was $36 per share.Which of the following journal entries would be used to record the purchase of treasury stock?

Question

Quizplus · Accepted Answer

Treasury stock is recorded at cost.The entry to record the repurchase is recorded as a debit (increase)to treasury stock and a credit (decrease)to cash for $36,000 (or 1,000 Shares purchased × Cost of $36 per share).

Llewelyn Company Purchased 1,000 Shares of Its Own $10 Par