On September 1, 2020, Concord Corporation reacquired 31200 shares of its $15 par value common stock...

On September 1, 2020, Concord Corporation reacquired 31200 shares of its $15 par value common stock for $20 per share. Concord uses the cost method to account for treasury stock. The journal entry to record the reacquisition of the stock should debit

Expert Solution

Under cost method the firm recognise because at which the shares are re purchased and ignore the par value. Also show in this method the treasury stock account is debited and cash account is credited while acquiring the shares.

In other words it can be said that the treasury stock is to be recorded at the cost at which the shares are repurchased. .

Therefore if the shares are the Purchase and the company uses the cost method to account for treasury stock then the journal entry to record the requisition of the stock should debit the treasury stock account by 31,200*20 = $624, 000

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ekkarill92 answered 2 years ago

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