The following excerpt is from an article reported in the May 7, 2014, online issue of Bloomberg.

Question:

The following excerpt is from an article reported in the May 7, 2014, online issue of Bloomberg.
(Blomberg) Ford Motor Co. (F) said it will repurchase $1.8 billion of its shares to reduce dilution from recent stock grants to executives.
The par amount per share for Ford 's is $0.01. Paid-in capital-excess of par is $5.39 per share on average. The market price was $16.
Required:
1. Suppose Ford reacquires 112 million shares through repurchase on the open market at $16 per share. Prepare the appropriate journal entry to record the purchase. Ford considers the shares it buys back to be treasury stock.
2. Suppose Ford considers the shares it buys back to be retired rather than treated as treasury stock. Prepare the appropriate journal entry to record the purchase.
3. What does the company mean by saying that the buyback will serve "to offset dilution from executive compensation"?

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...