Accounting for Share Repurchase and Cancellation On January 3, 2018, Tommyboy Corporation repurchases and cancels 250,000 of its outstanding common shares for \(\$ 18\) per share. These shares were originally issued for \(\$ 20\) per share.

Required:

1. Prepare the journal entry to record this transaction.

2. How will this transaction affect Tommyboy's 2018 statement of earnings?

\section*{Cornerstone Exercise