Question

Borner Communications’ articles of incorporation authorized the issuance of 150 million common shares. The transactions described below effected changes in Borner’s outstanding shares. Prior to the transactions, Borner’s shareholders’ equity included the following: Shareholders’ Equity ($ in millions) Common stock, 135 million shares at $1 par $ 135 Paid-in capital—excess of par 405 Retained earnings 245 Required: Assuming that Borner Communications retires shares it reacquires (restores their status to that of authorized but unissued shares), record the appropriate journal entry for each of the following transactions: (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) On January 7, 2018, Borner reacquired 2 million shares at $5.00 per share. On August 23, 2018, Borner reacquired 4 million shares at $2.50 per share. On July 25, 2019, Borner sold 3 million common shares at $5 per share

Answer 1

Preparation of Journal entries for each transaction in Borner Communications :
On January 7, 2018, Borner reacquired 2 million shares at $5.00 per Share .
Date	General Journal	Debit	Credit
07-01-18	Common stock (2 million shares @ $ 1 par )	$ 2.00
	Paid in capital - Excess of par (2 million shares @ $3 *)	$ 6.00
	Retained earnings (Retained earnings)	$ 2.00
	To Cash (2 million shares @ $5 per share)		$10.00
	(To Record the Re acquisiton of 2 million shares by borner)
*	Paid in capital - excess of par = 405/135 million shares = $ 3
On August 23, 2018, Borner reacquired 4 million shares at $2.50 per share
Date	General Journal	Debit	Credit
23-08-18	Common stock (4 million shares @ $1 par value)	$ 4.00
	Paid in capital - Excess of par (4 million shares @ $2.5 per share)	$10.00
	To paid in capital - share repurchase ( Difference)		$ 4.00
	To Cash   (4 million shares @ $3 per share)		$10.00
	(To Record the Re acquisiton of 4 million shares by borner)
On July 25, 2019, Borner sold 3 million common shares at $5 per share
Date	General Journal	Debit	Credit
25-07-19	Cash   (3 million shares @ $ 5 per share)	$15.00
	To Common stock (3 million shares @ $1 par value)		$ 3.00
	To paid in capital - Excess of par ( Difference)		$12.00
	(To Record the Re acquisiton of 3 million shares by borner)