Cost method to account for treasury stock


Problem: On June 15, Bunting Corporation reacquired 12,000 shares of its $10 par value common stock for $18 per share. Bunting uses the cost method to account for treasury stock. The journal entry to record the reacquisition of the stock should debit:

a. Common Stock for $120,000

b. Common Stock for $120,000 and Paid-in Capital in Excess of Par for $96,000

c. Treasury Stock for $216,000

d. Treasury Stock for $120,000

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Finance Basics: Cost method to account for treasury stock
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