Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

TraWell, Inc., reported the following shareholder's equity on January 1, 2020: Common shares - 600,000 no par value, issued and outstanding $4,788,000 Contributed surplus-share repurchase

image text in transcribed

TraWell, Inc., reported the following shareholder's equity on January 1, 2020: Common shares - 600,000 no par value, issued and outstanding $4,788,000 Contributed surplus-share repurchase 28,000 Retained earnings 6,200 On March 1, 2020, the company issued an additional 46,000 common shares at $9.00 each. Thereafter on July 1, 2020, it issued an additional 34,000 common shares to call option holders. The strike price was $8.20 each and the market value was $9.10 each. On October 1, 2020, it bought back 100,000 common shares at $9.20 each and cancelled them. The appropriate journal entry to record the transaction on October 1 would be: a.No journal entry is required for this transaction as the shares have been cancelled. b.DEBIT-Common Shares [$800,000); DEBIT-Contributed Surplus - Share Repurchase [$28,000); DEBIT- Loss on Share Repurchase ($102,000); CREDIT-Cash [$920,000). C.DEBIT-Common Shares_[$800,000); DEBIT-Contributed Surplus - Share Repurchase ($28,000); DEBIT- Loss on Share Repurchase [$20,000); DEBIT-Retained Earnings [$82,000]; CREDIT-Cash [$920,000). d.DEBIT-Common Shares_[$920,000); CREDIT-Cash ($920,000). e.DEBIT-Common Shares [$806,000); DEBIT-Contributed Surplus - Share Repurchase [$28,000); DEBIT- Retained Earnings [$86,000); CREDIT-Cash ($920,000]

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Computer Accounting With Peachtree Complete 2011

Authors: Carol Yacht, Peachtree Software

15th Edition

007811098X, 978-0078110986

More Books

Students also viewed these Accounting questions

Question

=+a) What were the subjects?

Answered: 1 week ago

Question

Explain the Concept of Audit Sampling?

Answered: 1 week ago