Question

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. What journal entries would be used to record the purchase of treasury stock?

Answer 1

Answer: Increase the treasury stock account and decrease the cash account by $36,000.

Step-by-step explanation:

The journal entries that would be used to record the purchase of treasury stock will be to increase the treasury stock account and decrease the cash account by $36,000.

Note that the $36000 was calculated as:

= 1,000 shares × $36 per share

= $36,000