On January 1, 2020, Urban Inc. issued 10,000 shares of $1 par common stock for $10 per share. On June 30, 2020, Urban Inc. reacquired 1,000 shares of common stock at $8 per share. On December 15, 2020, Urban Inc. reissued 500 shares of common stock at $12 per share. Assume that Urban accounts for repurchases of its common stock as direct stock retirements. The entry on June 30, 2020, to account for the direct stock retirement would include a Credit to Paid-in Capital in Excess of Par-Common Stock for $2,000. Credit to Retained Earnings for $2,000. Debit to Paid-in Capital in Excess of Par-Common Stock for $9,000. Debit to Retained Earnings for $9,000.

On January 1, 2020, Urban Inc. issued 10,000 shares of $1 par common stock for $10 per share. On June 30, 2020, Urban Inc. reacquired 1,000 shares of common stock at $8 per share. On December 15, 2020, Urban Inc. reissued 500 shares of common stock at $12 per share. Assume that Urban accounts for repurchases of its common stock as direct stock retirements. The entry on June 30, 2020, to account for the direct stock retirement would include a Credit to Paid-in Capital in Excess of Par-Common Stock for $2,000. Credit to Retained Earnings for $2,000. Debit to Paid-in Capital in Excess of Par-Common Stock for $9,000. Debit to Retained Earnings for $9,000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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