On December 31, 2008, Rebel Corporation's balance sheet reported the following.
During 2009, Rebel decided to discontinue accounting for share buybacks as treasury shares. Instead, the shares will be treated as having been retired.
Required:
Prepare the appropriate journal entry to effect this change.
$$\begin{array} { l r }
\text { Common stock, \$1 par } & \$ 1,000,000 \
\text { Paid-in capital - excess of par } & 4,000,000 \
\text { Retained earnings } & 5,280,000 \
\text { Treasury stock } ( 20,000 \text { shares at cost } ) & ( 625,000 )
\end{array}$$

Question

On December 31, 2008, Rebel Corporation's balance sheet reported the following.
During 2009, Rebel decided to discontinue accounting for share buybacks as treasury shares. Instead, the shares will be treated as having been retired.
Required:
Prepare the appropriate journal entry to effect this change.
 $$\begin{array} { l r } 
\text { Common stock, \$1 par } & \$ 1,000,000 \
\text { Paid-in capital - excess of par } & 4,000,000 \
\text { Retained earnings } & 5,280,000 \
\text { Treasury stock } ( 20,000 \text { shares at cost } ) & ( 625,000 )
\end{array}$$

Quizplus · Accepted Answer

The Answer of On December 31, 2008, Rebel Corporation's balance sheet reported the following.
During 2009, Rebel decided to discontinue accounting for share buybacks as treasury shares. Instead, the shares will be treated as having been retired.
Required:
Prepare the appropriate journal entry to effect this change.
 $$\begin{array} { l r } 
\text { Common stock, \$1 par } & \$ 1,000,000 \
\text { Paid-in capital - excess of par } & 4,000,000 \
\text { Retained earnings } & 5,280,000 \
\text { Treasury stock } ( 20,000 \text { shares at cost } ) & ( 625,000 )
\end{array}$$

On December 31, 2008, Rebel Corporation's Balance Sheet Reported the Following