Answered

Find solutions to your problems with the help of IDNLearn.com's expert community. Ask any question and receive timely, accurate responses from our dedicated community of experts.

mega corporation repurchased 1,000 shares of its $1 par value common stock for $8,000 and recorded the entry with a debit to . (check all that apply.)multiple choice question.treasury stock and a credit to cash of $8,000common stock for $1,000 and additional paid-in capital of $7,000 and a credit to cash of $8,000common stock and a credit to cash of $8,000cash of $8,000 and credit to common stock for $1,000 and additional paid-in capital of $7,000treasury stock for $1,000 and additional paid-in capital of $7,000 and a credit to cash of $8,000

Sagot :

Mega corporation should record its journal entries for purchasing treasury stock as Treasury stock and a credit to cash of $8,000 (A).

Treasury stock is the previously outstanding stock bought back by a company from its stockholders to decrease the amount of the company's outstanding shares on the open market. Treasury stock remains issued but is not included in the distribution of dividends or the calculation of earnings per share (EPS).

The purchase treasury stock transaction will be recorded as:

Treasury stock    $8,000

               Cash                    $8,000

Notice that the par value of common stock will not be calculated in the treasury stock purchasing activity becuase both stocks will be recorded under 2 different accounts. The repurchasing price of treasury stock will be used as the price base when the company decide to resell the treasury stock back to the market. Hence, the current treasury stock value is $8 per stock.

Learn more about Treasury Stock here: https://brainly.com/question/14288800

#SPJ4

Thank you for using this platform to share and learn. Keep asking and answering. We appreciate every contribution you make. For trustworthy and accurate answers, visit IDNLearn.com. Thanks for stopping by, and see you next time for more solutions.