What are the journal entries when the treasury stock is sold?

The company can record the sale of treasury stock with the journal entry of debiting the cash account and crediting the treasury stock account when the sale price equals its cost. Opposite to the purchase, the sale of treasury stock increases both total assets and total equity.

What happens when treasury stock is resold?

The cash account is credited to record the expenditure of company cash. If the treasury stock is later resold, the cash account is increased through a debit and the treasury stock account is decreased, increasing total shareholders’ equity, through a credit.

What is treasury stock and what is the journal when purchased?

Treasury stock is the stock that the company repurchases its own shares back from the market. Likewise, the company needs to record the purchase of treasury stock as a contra account to stockholders’ equity on the balance sheet.

How do you record treasury stock transactions?

1 Accounting for the purchase of treasury stock. A reporting entity should recognize treasury stock based on the amount paid to repurchase its shares. It should be recorded as a reduction of stockholders’ equity (i.e., as a contra-equity account).