Question

On February 10, the corporation purchases back 2,000 shares of its own common stock for $50 per share. The entry to record the purchase would include a:____.
a. debit to Cash for $100,000.
b. credit to Treasury Stock for $100,000.
c. debit to Treasury Stock for $100,00.
d. debit to Common Stock for $100,000.

Answer 1

Answer:

c. debit to Treasury Stock for $100,00.

Explanation:

The journal entry to record the purchase is given below:

Treasury stock Dr (2,000 × $50) $100,000

        To cash $100,000

(Being the purchase is recorded)

Here treasury stock should be debited as it decreased the stockholder equity and credited the cash as it also decreased the assets

Therefore the option c is correct