Answer:
The entry to record the purchase of treasury stock will be an increase in treasury stock account and decrease in the cash account by $30000.
market price of the stock= [tex]\$ 25[/tex]
Number of shares= 1200.
∴ [tex]\$25\times 1200= \$ 30000[/tex]
Treasury stock will be recorded at cost.
Journal entry:
Treasury stock Dr---------------$30000
Cash Cr-----------------$30000
(Purchased treasury stock)
