What account should be debited when a loss on retirement of treasury shares is recorded?

premium for the excess of the subscription price over the par value of shares subscribedand

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43.The purchase of treasury ordinary sharesa.Decreases authorized ordinary share capitalb.Decreases issued ordinary sharesc.Decreases outstanding ordinary sharesd.Has no effect on ordinary shares outstanding

44.When treasury shares are purchased for more than par value, what account or accountsshall be debited

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45.Treasury shares were acquired for cash at a price in excess of par value. The treasuryshares were subsequently sold for cash at a price in excess of acquisition cost. What isthe effect on total shareholders’ equity?

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46.Treasury shares were acquired for cash at more than par value, and then subsequentlysold for cash at more than acquisition price. What is the effect on share premium fromtreasury shares?

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47.How would a share split in which the par value per share decrease in proportion to the

Under Securities and Exchange Commission regulations, privately held companies can sell shares of stock without going public by making a private placement. Because the stock is not traded publicly, the company must derive the per share value by other means. Accountants use several methods to determine a value that is acceptable to the stock buyer and seller. The stock may need to be revalued if the company decides to buy its stock shares back.

Treasury Stock

1. Authorized shares are the stock shares a company can legally sell. When stock shares sell, they go from being authorized to being issued. The money collected from the stock sale is shown in the asset section of the balance sheet as a debit to cash and in the stockholders' equity section as a credit to common stock. In the stock buyback, the repurchased shares are no longer classified as issued shares but as treasury stock.

Treasury Stock Account Classification

1. The stockholders' equity section has two main headings: paid-in capital and retained earnings. Treasury stock is listed under its own heading in the stockholders' equity section below the retained earnings heading. If the company’s financial status has changed significantly from when the stock was first sold, the stock may need to be revalued to accurately reflect the current value. To record the repurchase, the treasury stock account is debited and the cash account in the asset section is credited.

Treasury Stock Reissued

1. If a company decides to reissue treasury stock for a new private placement, the treasury stock basis is the share price as of the repurchase date. If the treasury stock is revalued and sold above the basis, the balance sheet shows a debit to cash for all the money received. In the stockholders' equity section, the treasury stock account is credited with the total basis price, and the additional paid-in capital account is credited with the gain.

Treasury Stock Reissue Loss

1. If the treasury stock revalue amount is less than the basis, the money received is debited to the cash account, and the loss is debited to the additional paid-in capital account. The cash amount received and the loss amount are added together and credited to the treasury stock account.

Treasury Stock Retirement

1. If a company decides to retire its treasury stock, it uses the share price as of the repurchase date as the basis. If the retirement stock revaluation price is higher than the basis, the balance sheet shows the transaction as a debit to common stock at the basis price and a debit to paid-in capital for the amount over the basis. Treasury stock is credited for the full amount.

Treasury Stock Retirement Loss

1. If the retirement stock revaluation price is lower than the basis, the transaction is shown as a debit to common stock at the basis price. A credit is made to paid-in capital for the amount under the basis and a credit is made to treasury stock at the basis price.

What is the journal entry for treasury retirement?

What happens when treasury stock is retired?

How do you record retirement of shares?

What is the accounting procedure when treasury shares are sold at a price lower than its cost price?