Answer:
decreased total equity by $14,400
Explanation:
The treasury stock reduced the balance of the stockholder equity as the issuing company buys this stock back.
Given that
Number of shares purchased = 1,600 shares
Paid per share = $9
Common stock = $2
So, the treasury stock would be
= Number of shares purchased × per share
= 1,600 shares × $9
= $14,400
The journal entry would be
Treasury Stock A/c Dr $14,400
To Cash A/c $14,400
(Being treasure stock is purchased for cash)
