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View Full Version : Accounting for treasury stock used in stock dividend


sidjes
Feb 6, 2007, 10:08 AM
How do I account for treasury stock use in a stock dividend for preferred stock?
What would the journal entry by?
I don't believe I should debit retained earnings for this transaction, but I'm not sure what account to debit.
Please Help

CliffARobinson
Mar 16, 2012, 04:18 PM
The cost method of accounting for treasury stock records the amount paid to repurchase stock as an increase (debit) to treasury stock and a decrease (credit) to cash. The treasury stock account is a contra account to the other stockholders' equity accounts and therefore, has a debit balance.

Source: Cliff Notes - Accounting for Stock Transactions (http://www.cliffsnotes.com/study_guide/Accounting-for-Stock-Transactions.topicArticleId-21248,articleId-21193.html)