When the common stock is reacquired at cost higher than issue cost requires a Debit to Loss on Repurchase of Common Shares

Question

When the common stock is reacquired at cost higher than issue cost requires a Debit to Loss on Repurchase of Common Shares Option B is correct This done when Par Value method is used Journal Entry for reacquisition of Common Shares in above case will be Credit Account Titles and Explaination Treasury Stock Loss on Repurchase of Common Shares Cash Debit Par Value based on Avg issued price Excess Paid to reacquire over and above par value Total Amount Poid to reacquire shares Explanation is written in Debit and Credit Coloums to understood what values are written Now Also note in the case when shares were initially issued at price higher than par value Then instead of using Loss on Repurchase of Common Shares Account we will use credit balance of Addition Paid in Capital It will be debited instead of Loss on Repurchase of Common Shares Hope you understood the concept if any query feel free to ask in comment section

Kunduz · Accepted Answer

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