Bailey Inc.issues 100,000 shares at $11 / share in January.Later that year the company is able to repurchase 9,000 of these shares at $10 per share.The effect of this is

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When shares are repurchased at a price lower than the issue price, the difference is credited to the contributed surplus account. Here, the repurchase price is $10, which is $1 less than the issue price of $11, resulting in a $9,000 increase in the contributed surplus account (9,000 shares x $1).