Welcome, Guest

Want to take part in these discussions? If you have an account, sign in now.

If you don't have an account, apply for one now.

1. • CommentAuthorbelavia
   • CommentTimeApr 8th 2007

    
   What is the difference in the journal entry for buying back shares for treasury purposes vs. retiring them.
   As an example, assume a company buys back 1,000 shares at $5. Journal Entry is:
   DR Shares $5,000
   CR Cash $5,000
   What if now the company does not retire the shares but keeps them as treasury shares?
   
   Thank You
2. • CommentAuthorAbusamak
   • CommentTimeApr 10th 2007

    
   we record treasury stock by cost method,and you must take the market price per share.
   if you want to purchase 1000 share with par value 1$ and market value of 5$ you shall record:
   Dr. treasury stock 5000
   Cr. cash 5000
   hent,
   their are no diffrence between retier and purchasing treasury stock.
   many goals for company retier stocks:
   1- dcrease the market shares of company stocks te icrease the stock price
   2- keep T.S. as a copensations for mangement
   good luck.