Company ABC is authorized to issue 10,000,000 shares of $2.50 par common stock by the state of Florida on 12/31/2008. On 1/1/2009, ABC issues 4,000,000 shares of common stock for $10 per share. In addition, they also issued 100,000 shares of $100 par 10% non-cumulative participating preferred stock. Assume that no additional shares of preferred stock are issued (or repurchased), and further that no dividends are declared in 2009, 2010, and 2011. Assume that on 8/1/2013 ABC repurchases 100,000 shares of common stock for $20 per share, and decides to retire these shares. What is the journal entry to record this retirement?

Company ABC is authorized to issue 10,000,000 shares of $2.50 par common stock by the state of Florida on 12/31/2008. On 1/1/2009, ABC issues 4,000,000 shares of common stock for $10 per share. In addition, they also issued 100,000 shares of $100 par 10% non-cumulative participating preferred stock. Assume that no additional shares of preferred stock are issued (or repurchased), and further that no dividends are declared in 2009, 2010, and 2011. Assume that on 8/1/2013 ABC repurchases 100,000 shares of common stock for $20 per share, and decides to retire these shares. What is the journal entry to record this retirement?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

Problem 57E: Outstanding Stock Lars Corporation shows the following information in the stockholders equity...

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