Llewelyn Company purchased 1,000 shares of its own $10 par value common stock when the market price of the stock was $36 per share. How would this event affect the company's financial statements?
A. Increase the treasury stock account and decrease the cash account by $36,000.
B. Increase the treasury stock account by $36,000, increase the common stock account by $10,000, and increase the paid-in capital account in excess of par value ? common account by $26,000.
C. Increase the cash account by $36,000, decrease the treasury stock account by $10,000, and increase the paid-in capital account in excess of par ? Common account by $26,000.
D. Increase the treasury stock account and increase the paid-in capital account in excess of par value ? common account by $10,000.
Answer: A
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