Liquidation Universe Corporation began operations in 2012. After issuing its common stock to the public, Liquidation Universe Corporation completed the following treasury stock transactions:
a. Purchased 2,200 shares of the company’s $1 par common stock as treasury stock, paying cash of $6 per share.
b. Sold 1,000 shares of the treasury stock for cash of $9 per share.
1. Journalize these transactions. Explanations are not required.
2. What kind of account is Treasury Stock? After completing the two transactions,how should Liquidation Universe report the treasury stock on its balance sheet?