PROBLEMA II Ex$.15-132-$Treasury stock.

For numerous reasons, a corporation may reacquire shares of its own capital stock. When a company purchases treasury stock, it usually accounts for the stock using the cost method.

Instructions:

Write the account name or account names on how a company would account for each of the following: $($Indicate if the account is debited or credited in the appropriate column$).$

Purchase of shares at a price less than par value.

Subsequent resale of treasury shares at a price less than purchase price, but more than par value.

Subsequent resale of treasury shares at a price greater than both purchase price and par value.

Effect on net income.

PROBLEM II SOLUTION:

$\backslash$table$[[$GENERAL JOURNAL$],[$#$,$ACCOUNT NAME,REF,DEBIT,CREDIT$],[1,,,,],[,,,,],[2,,,,],[,,,,],[,,,,],[,,,,],[3,,,,],[,,,,],[,,,,],[,,,,],[,,,,]]$