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    sidjes's Avatar
    sidjes Posts: 1, Reputation: 1
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    #1

    Feb 6, 2007, 10:08 AM
    Accounting for treasury stock used in stock dividend
    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's Avatar
    CliffARobinson Posts: 1,416, Reputation: 101
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    #2

    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
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