Purchasing Treasury Stock - Simulations

Question 1

Treasury Stock Par Method - BUY BACK

Answer 1

2. Dr. Treasury Stock - PAR
3. Dr. APIC Common stock - original sold APIC
4. Dr. APIC T/S if there is a credit for it
5. Dr. Retained earnings if needed
6. Cr. Cash
7. Cr. APIC T/S if needed

Question 2

Treasury Stock Par Method - RESELL

Answer 2

1. Dr. Cash
2. Cr. Treasury Stock - Par
3. Cr. APIC Common Stock

Question 3

Treasury Stock Cost Method- BUY BACK

Answer 3

1. Dr. Treasury Stock

2. Cr. Cash

Question 4

Treasury Stock Cost Method- RESELL

Answer 4

1. Dr. Cash
2. Dr. APIC T/S if there is credit in APIC T/S
3. Dr. Retained earnings if needed
4. Cr. Treasury Stock - cost
5. Cr. APIC T/S

Question 5

Journal entry for retiring treasury stock

Answer 5

Cost Method
Dr. Common Stock - Par
Dr. APIC[C/S] - original APIC
Dr. R/E if needed
Cr. Treasury Stock - cost

Par Method
Dr. Common Stock - Par
Cr. Treasury Stock

Question 6

Donated Treasury Stock

Answer 6

Recording Donated Treasury Stock
Dr. Donated T/S - FV
Cr. APIC - FV

Selling donated T/S
Dr. Cash - sales price
Dr. APIC - If SP is less than original FV
Cr. APIC - if SP is greater than original FV
Cr. Donated T/S at original BV or FV