When Treasury Shares Are Purchased for More Than the Par

question 61

Multiple Choice

When treasury shares are purchased for more than the par value of the shares and the cost method is used to account for treasury shares, what account(s) should be debited?

• A)Treasury shares for the par value and share premium for the excess of the purchase price over the par value.
• B)share premium for the purchase price.
• C)Treasury shares for the purchase price.
• D)Treasury shares for the par value and retained earnings for the excess of the purchase price over the par value.