Question 3 (20 marks): 1. For numerous reasons, a corporation may reacquire shares of its own shares. When a company purchases treasury shares, it usually accounts for the shares using the cost method. Required (4 marks); Explain how a company would account for each of the following: a. Subsequent resale of treasury shares at a price less than purchase price, but more than par value. b. Subsequent resale of treasury shares at a price greater than both purchase price and par value. c. Effect on net income. d. Purchase of shares at a price less than par value. 2. On January 1, 2012, Desert Windows Corporation issued $1,200,000 of 15-year, 12% convertible debentures at 110. Interest is to be paid semiannually on June 30 and December 31. Each $1,000 debenture can be converted into four shares of Desert Windows Corporation $10 par value common stock after December 31, 2013. On January 1, 2014, $500,000 of the debentures is converted into common stock, which is then selling ACC201 TMA at $320. An additional $500,000 of the debentures is converted on May 31, 2014. The market price of the common stock is then $330. Accrued interest at May 31 will paid on the next interest date. Bond premium is amortized on a straight-line basis. Required (16 marks): Make the necessary journal entries for: 1. December 31, 2013. (4 marks) . January 1, 2014. (4 marks) - May 31, 2014. (4 marks) . June 30, 2014. (4 marks)