Buy back of shares

Record the journal entry for the share buyback. The journal entry is very simple: the firm debits Treasury Stock for the total purchase price and credits Cash for the same amount. 

• Treasury stock is a contra-equity account. It is not treated as an asset, because a company cannot legally invest in its own stock. Rather, treasury stock is presented on the balance sheet, where it reduces the total amount of owner's equity.
• If the shares are purchased with another asset (for example, land instead of cash), that asset account should be credited instead.