Question
Company A purchased treasury stock last year for $8/share, totaling $64,000 (8,000 shares * $8 per share). Now Company A is repaying a debt owed
Company A purchased treasury stock last year for $8/share, totaling $64,000 (8,000 shares * $8 per share).
Now Company A is repaying a debt owed to Company B (debt total is $28,000) is repaying company B by issuing them 7,200 shares of their tresaury stock.
Is this the correct journal entry to show this transfer?
Accounts payable: $28,000 debit
Paid In Capital of Excess of par $29,600 debit
Treasury Stock $57,600 credit ($8 * 7,200)
I am pretty certain of the figures I used however I am uncertain as to which account I would use for the second debit.
Thank you for your help.
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