Question
The shareholders' equity section of the 30 June 2017, statement of financial position for Bravo Bistro Ltd appeared as follows. Ordinary shares, 2 000 shares
The shareholders' equity section of the 30 June 2017, statement of financial position for Bravo Bistro Ltd appeared as follows.
Ordinary shares, 2 000 shares $7 000
Retained earnings $5 400
Total shareholders' equity $13 000
Assume that all of the 2 000 shares of Bravo Bistro Ltd's that was issued as of 30 June 2017, was issued at $3.50 per share.
On 1 September 2017, Bravo Bistro Ltd reacquired 1 000 of its ordinary shares for $4.50 per share.
If all of the 1 000 shares that Bravo Bistro Ltd repurchased on 1 September were later reissued for $4.50 per share, the journal entry to record this transaction includes a debit to what account and for what amount?
| $4 500 to cash | ||
| $2 000 to buy-back | ||
| $4 000 to contributed capital | ||
| $500 to retained earnings |
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