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    aspannu_007's Avatar
    aspannu_007 Posts: 3, Reputation: 1
    New Member
    		  
    #1

    Apr 13, 2007, 07:54 AM
    How would a corporation buy back issued shares?
    Small Business owned by one owner.

    100 shares issued to partner at $10 per shares. Accounting entry was.
    dr. cash $1000
    Cr common shares 100
    Cr additional paid in capital $900

    What would be accounting entry when we purchase back 100 shares at $15? Would the entry at the bottom be correct or it needs changes?
    Cr. Cash $1500
    Dr. common shares 100
    Dr. additional paid in capital $1400 (this entry would bring capital account to Dr 500 would it be OK)
    Thanks
    Smith21000's Avatar
    Smith21000 Posts: 69, Reputation: 9
    Junior Member
    		  
    #2

    Apr 13, 2007, 12:32 PM
    Is this reacquired stock going to be held as treasury stock or is it going to be retired, this will make a difference.
    aspannu_007's Avatar
    aspannu_007 Posts: 3, Reputation: 1
    New Member
    		  
    #3

    Apr 13, 2007, 02:07 PM
    Quote Originally Posted by Smith21000
    Is this reacquired stock going to be held as treasury stock or is it going to be retired, this will make a difference.
    How would the entries differ if stock is held as a treasury stock or if it is retired? What are the advantages or disadvantages of each.

    Thanks
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