On August 1, 2014, Amherst Company reacquired 4,000 shares of its $15 par value common stock for $18 per share. Amherst uses the cost method to account for treasury stock. What journal entry should Amhurst make to record the acquisition of treasury stock? A debit to Treasury Stock for $60,000 and a debit to Retained Earnings for $12,000. A credit to Cash for $72,000 A debit to Treasury stock for $60,000 and a debit to APIC for $12,000. A credit to Cash for $72,000 A debit to Retained Earnings for $72,000 and a redit to cash for $72,000 debit to Treasury stock for $72,000 and a credit to cash for $72,000
On August 1, 2014, Amherst Company reacquired 4,000 shares of its $15 par value common stock for $18 per share. Amherst uses the cost method to account for
On August 1, 2014, Amherst Company reacquired 4,000 shares of its $15 par value common stock for $18 per share. Amherst uses the cost method to account for treasury stock. What journal entry should Amhurst make to record the acquisition of treasury stock?
A debit to Treasury Stock for $60,000 and a debit to
A debit to Treasury stock for $60,000 and a debit to APIC for $12,000. A credit to Cash for $72,000
A debit to Retained Earnings for $72,000 and a redit to cash for $72,000
debit to Treasury stock for $72,000 and a credit to cash for $72,000
Treasury stock is a reacquired stock from its own stockholders. In other words, when a company buy back its own shares from its shareholders then the stock bought back is called treasury stock.
Under the cost method, treasury stock is recorded at the actual cost paid to reacquire the stock from its stockholders by the company.
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