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If a company has, say, 0,000 in stockholders' equity and spends ,000 to buy back shares, its balance sheet will show 0,000 in equity, less ,000 in treasury stock, for a total of 5,000.
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The amount the company paid for the bought-back shares goes into an account called "treasury stock." This is a negative-equity or contra-equity account, meaning the balance reduces the total amount of stockholders' equity.
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