The use of treasury stock has become a significant business strategy for many companies. Even Home Depot and Lowe's has used treasury stock in a major way. Why do companies purchase treasury stock? How is treasury stock accounted for when purchased under the cost method? How are resales of treasury stock above the acquisition cost and below the acquisition cost accounted for?

Convertible bonds are a source of funding for companies with financial difficulties.Many times these companies must add the "carrot" of the conversion feature to get the bonds sold at a more sensible interest rate. How are convertible bonds recorded when first issued? How does the actual conversion of the bonds get accounted for?

Answer rating: 100% (QA)

ANSWER Companies purchase treasury stock for a variety of reasons including 1 To reduce the number o... View the full answer