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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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How does a corporation report the Treasury Stock account under the cost method of accounting for treasury stock? Under the par value method?

To determine

Explain the way corporation reports the treasury stock account under the cost method of accounting and under par value method.

Explanation

Cost method: Under this method, at the time of reacquiring the treasury stock, it will be debited for the amount paid. At the time of reissuance, treasury stock will be credited and cash will be debited with the proceeds received. Credit the additional paid-in capital for the difference amount.

Par value method: Under this method, at the time of reacquiring the treasury stock, it will be debited wi...

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