Consider the following sequence of transactions entered into by Amesbury Corp.

January$1,2023$: $5,000,000$ no par value common shares are sold$($issued$)$ for $ $20$ each.

January$1,2024$:$600,000$ common shares are repurchased in the open market for $ $16$ each and immediately cancelled.

There were no other capital$$ transactions, and the company had not paid any dividends.

Required: a$.$ Prepare the journal entries for the two transactions.

b$.$ Review the journal entry for January $1,.$ How much was credited other than cash? Does this credit reflect good or

bad management? As a shareholder, would you be happy or unhappy about this credit entry?

$2024$

c$.$ What would have been the journal entry for January $1,2024,$ had the repurchase price been $$40?$

d$.$ In the journal entry for requirement c$.,$ explain why the debit goes to reduce retained earnings. How would a shareholder

interpret the reduction in retained earnings?

Requirement a$.$ Prepare the journal entries for the two transactions. $($Record debits$$ first, then credits. Explanations are not$$ required.$)$

January$1,2023$: $5,000,000$ no par value common shares are sold$($issued$)$ for $ $20$ each.