A company acquires 1,000 shares of its own $1 par common stock for $15 per share.This purchase would be recorded with a:

Question

Quizplus · Accepted Answer

When a company acquires its own stock, it is recorded as a reduction in stockholders' equity, specifically as a debit to Treasury Stock. The cost of the shares, in this case $15,000 ($15 per share x 1,000 shares), is credited to the same account. There is no impact on the par value or additional paid-in capital accounts as the shares were already outstanding and previously issued. Therefore, the correct choice would be D, a Debit to Treasury Stock for $15,000.

A Company Acquires 1,000 Shares of Its Own $1 Par