Rick Co purchases 8500 shares of the companys 6 par common s

Rick Co. purchases 8,500 shares of the company\'s $6 par common stock for $8 per share. Journalize the transaction.

Solution

Account titles Debit Credit Treasury Stock $     68,000 Cash $     68,000 (To repurchase own shares) Working: Amount to be paid = Number of shares * buying cost per share = 8500*$8 = $     68,000 When compay buying its own shares they are called treasury stock. It is shown in balance sheet in owner\'s equity part.but, in negative form.