Treasury Stock
Two methods to account for treasury stock (T/S)
- Cost method (emphasized).
- Use the cost of the shares to record the repurchase of treasury shares.
- Cost of shares is used when shares resold.
- Par (appendix).
- Use of the par of the shares to record the repurchase of treasury shares. Removal of the original premium, if any.
- Use of the par when treasury shares are resold.