Deeper Company paid $21,000 to buy 4,000 shares of its $6 par value common stock for the treasury. The stock was originally sold for $25,000. The entry to record the purchase includes a: debit to Treasury Stock for $21,000. credit to Treasury Stock for $25,000. debit to Treasury Stock for $25,000. credit to Common Stock for $21,000.

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Deeper Company paid $21,000 to buy 4,000 shares of its $6 par value common stock for the treasury

Accounting Mar 19, 2021

Deeper Company paid $21,000 to buy 4,000 shares of its $6 par value common stock for the treasury. The stock was originally sold for $25,000. The entry to record the purchase includes a:

1. debit to Treasury Stock for $21,000.
2. credit to Treasury Stock for $25,000.
3. debit to Treasury Stock for $25,000.

1. credit to Common Stock for $21,000.

Expert Solution

Answer:

a .

Step-by-Step explanation

The entry to record the purchase of treasury stock is as follows:

Treasury stock account---------Debit-------------$21,000

Cash account---------------------Credit---------------$21,000

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