Buyback of shares   LO7 Lobster Ltd decided to repurchase 10% of its ordinary shares under a buyback scheme for $5.60 per share. At the date of the buyback, the equity of Lobster Ltd consisted of: Share capital — 4 million shares fully paid $4 000 000 General reserve 600 000 Retained earnings 1 100 000 The costs of the buyback scheme amounted to $3500. Required 1. Prepare the journal entries to account for the buyback. Explain the reasons for the entries made. 2. Assume that the buyback price per share was equal to 70c per share. Prepare journal entries to record the buyback, and explain your answer.