October 30, 2016 admin

Treasury Stock

Liabilities and Net Worth

TREASURY STOCK NET WORTH ACCOUNT
2803

ACCOUNT EXPLANATION
Cost of Preferred or Common stock of the dealership corporation reacquired by gift or purchase but not legally retired.
TRANSACTIONS
  Jrnl. Dr. Cr.
  Purchase of outstanding Common stock for cash at a premium CD
    Treasury Stock 2803
      Cash in Bank 1001
             
  Sale of Treasury Common stock at a premium over reacquired cost CR
    Cash in Bank—General 1001
      Other Capital (premium over acquisition cost of Treasury stock sold) 2802
      Treasury Stock (acquisition cost of Treasury stock sold) 2803
COMMENTS
  • This account should be used only by dealerships operating as corporations.
  • Subsidiary records should support this account. Separate accounts should be maintained for each class of Capital stock.
  • Transactions involving issuance, purchase or retirement of Capital stock should be handled in accordance with the advice of legal and tax counsel.