Borner Communications’ articles of incorporation authorized the issuance of 120 million common shares. The transactions described...

Borner Communications’ articles of incorporation authorized the issuance of 120 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, 105 million shares at $1 par	$	105
Paid-in capital—excess of par		315
Retained earnings		215

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 $5.50 per share.
On August 23, 2018, Borner reacquired 5 million shares at $3.00 per share.
On July 25, 2019, Borner sold 3 million common shares at $6 per share.

Expert Solution

Journal Entries (In Millions)
Date	Account Titles and Explanations	Debit	Credit
Jan. 7, 2018	Treasury Stock (2 million shares * $5.50 per share)	$11
	Cash		$11
	(To record the require of 2 million shares)
Aug. 23, 2018	Treasury Stock (5 million shares * $3 per share)	$15
	Cash		$15
	(To record the require of 5 million shares)
Jul. 25, 2019	Cash (3 million shares * $6 per share)	$18
	Common Stock (3 million shares * $1 per share)		$3
	Paid-in Capital - Excess of Par ($6 - $1 = $5 per share * 3 million shares)		$15
	(To record the issue of 3 million shares more than par value)

ekkarill92 answered 2 years ago

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