Question

In: Accounting

Motor Co. said it will repurchase $2.4 billion of its shares to reduce dilution from recent...



Motor Co. said it will repurchase $2.4 billion of its shares to reduce dilution from recent stock grants to executives.

The par amount per share for Motor ’s common stock is $0.01. Paid-in capital—excess of par is $5.99 per share on average. The market price was $19.0.

Directions:
1. Suppose Motor Co. reacquires 118.00 million shares through repurchase on the open market at $19.00 per share. Prepare the appropriate journal entry to record the purchase. Motor Co. considers the shares it buys back to be treasury stock.
2. Suppose Motor Co. considers the shares it buys back to be retired rather than treated as treasury stock. Prepare the appropriate journal entry to record the purchase.

Solutions

Expert Solution

ekkarill92 answered 1 year ago
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