Classic Corporation began operations in 2014. After issuing its common shares to the public, Classic Corporation completed the following treasury shares transaction:
a. Purchased 2,000 shares of the company’s $1 average price common shares as treasury shares, paying cash of $5 per share.
Journalize the transaction. Explanations are not required. Show how Classic Corporation will report treasury shares on its December 31, 2014 balance sheet.
In reporting the treasury shares, focus solely on the Treasury Shares account.
You may ignore all other accounts.