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- ACC 306 Week 2 DQ 1.docx
ACC 306 Week 2 Discussion 1 Accounting for Stockholders’ Equity NEW
Read Chapters 15 and 16 in the textbook.
Write: When stock of the company is purchased, treasury stock, three methods are available to record this transaction: the cost method, the par value method, and the constructive retirement method. Read the following articles:
Treasury Stock Accounting – Cost Method and Constructive Retirement Method (Links to an external site.)Links to an external site. (Links to an external site.)Links to an external site.
Treasury Stock – Par Value Method (Links to an external site.)Links to an external site.
Discuss the following:
The difference between the cost, par and constructive retirement method.
For the cost and par value methods, prepare journal entry examples of each using the following information:
1000 shares of $5 par stock were sold for $7.
500 shares were repurchased at a price of $6.
The 500 shares were later sold for $3500.
For the constructive retirement method prepare the following journal entry:
The shares were retired.
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