Recording: Treasury Stock vs$.$ Direct Stock Retirement

On December $31,$ the records for Lakers Inc. provided the following data on stockholders' equity.

Common stock, $$10$ par, $30,000$ shares issued: $$300,000$

Additional paid$-$in capital on coirmon stock, $$0\mathrm{.}30$ per share: $$9,000$

Treasury stock, $6,000$ shares $($cost $$9\mathrm{.}80$ per share$)$: $$58,800$

On that date, the stockholders vote to retire all of the treasury stock immediately and to purchase for direct retirement another $8,000$ shares of common stock currently trading at $$12\mathrm{.}50$ per share.

Required

a$.$ Provide the journal entry to retire the $6,000$ shares of treasury stock.

$\backslash$table$[[\backslash$table$[[$Date$],[$Dec$.31]],$Account Name,Dr$.,$Cr$.],[$Common Stock,$,60,000,0],[,$Paid$-$in Capital in Excess of Par$-$Common Stock,$,1,800,0],[,$Paid$-$in Capital$-$Retired Stock,uarr,$0,3,000],[,$Treasury Stock,,$0,58,800],[,$To retire treasury stock.,,,$]]$

b$.$ Provide the journal entry for the purchase and immediate retirement of the $8,000$ shares of outstanding common stock.

$\backslash$table$[[\backslash$table$[[$Date$],[$Dec$.31]],$Account Name,Dr$.,$Cr$.],[$Common Stock,$,80,000,0],[,$Paid$-$in Capital in Excess of Par$-$Common Stock,$,2,400,0],[,$Paid$-$in Capital$-$Retired Stock,uarr,$3,000,0],[,$Retained Earnings,$,14,600,0],[,$Cash,$AA,0,100,000],[,$To record purchase and retirement of common,,,$-1]]$

c$.$ Assume instead for part b that the company holds the $8,000$ shares in the treasury rather than retiring immediately. Record

$\backslash$table$[[$Date$,$Account Name,Dr$.,$Cr$.],[$Dec$.31,$Treasury Stock,$100,000,0],[,$Cash,$0,0],[,$To record purchase of common stock.,,$100,000]]$

d$.$ Determine the change in stockholders' equity after part $b$ and then again after part $c.$

Note: Indicate a decrease with a negative sign.

$\backslash$table$[[,$Part B$,$Part C$],[$Change in stockholders' equity,$$329,000$$$,(100,000)$