2. The stockholder’s equity section of Peter Corporation’s balance sheet at Dece

Question

2. The stockholder’s equity section of Peter Corporation’s balance sheet at December 31, 2014 is as follows:

Common stock ($10 par value); authorized 1,000,000 shares, issued and outstanding 900,000 shares $ 9,000,000 Additional paid-in-capital – common stock $ 2,700,000 Retained Earnings $ 1,300,000 TOTAL STOCKHOLDERS’ EQUITY $13,000,000

(a) Prepare the journal entry for the buyback and resale, assuming that the Peter Corporation retires the shares. (b) Prepare the journal entry for the buyback and resale, assuming that Peter Corporation does not retire the shares

Explanation / Answer

a.

b.

Particulars Debit Credit Treasury Stock 13000000      Cash 13000000 Common Stock 9000000 Additional paid in capital 2700000 Retained earnings 1300000       Treasury Stock 13000000

Related Questions

Navigate

• Browse (All)
• Browse 2
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.