Answer:
2. decreased total stockholders' equity.
Explanation:
January 7, 2020, stocks are issued:
Dr Cash 132,600
Cr Common stock 81,600
Cr Additional paid in capital 51,000
July 1, 2020, treasury stocks are purchased:
Dr Treasury stocks 10,200
Cr Cash 10,200
Treasury stocks is a contra equity account which reduces the value of total stockholders' equity. When they are purchased, treasury stocks account must be recorded at the full repurchase price of the stocks.
