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There are mainly two methods of accounting for treasury stock: the cost method and the par value method.

Purchase: The journal entry is to debit treasury stock and credit cash for the purchase price. For example, if a company buys back 10,000 shares at $5 per share, the amount debited and credited is $50,000 (10,000 x $5).

To record a repurchase, simply record the entire amount of the purchase in the treasury stock account. Resale. If the treasury stock is resold at a later date, offset the sale price against the treasury stock account, and credit any sales exceeding the repurchase cost to the additional paid-in capital account.

Common stock. The sale of the stock is recorded by increasing (debiting) cash and increasing (crediting) common stock by $5,000.

To record the stock purchase, the accountant debits Investment In Company and credits Cash. At the end of each period, the accountant evaluates the value of the investment. If the value declined, the accountant records an entry debiting Impairment of Investment in Company and credits Investment in Company.

Common stock is reported in the stockholder's equity section of a company's balance sheet.

If the corporation sells any of its treasury stock for less than its cost, the cash received is debited to Cash, the cost of the shares sold is credited to Treasury Stock, and the difference ("loss") is debited to Paid-in Capital from Treasury Stock (so long as the balance in that account will not become a debit

The entry to record the issuance of common stock at a price above par includes a debit to Cash. Cash is increased (debit) by the issue price. The journal entry would also include a credit to both Common Stock (increased) and Paid-In Capital in Excess of Par--Common Stock (increased).

Common Stock Company

Description Stock Purchase Par

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What are the two methods of accounting for treasury stock?

What is the journal entry for treasury stock?

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How do you account for common stock?

What type of account is a common stock?

How is common stock listed on the balance sheet?

How do you account for treasury shares?

What is the journal entry for common stock?

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