Assuming a corporation has no contributed surplus booked, when shares are reacquired at a cost greater than their original issue price and cancelled, what account(s)should be debited?
A)the share account for the total cost
B)the share account for the original issue price and contributed surplus for the additional
Amount
C)the share account for the average per share amount and retained earnings for the
Additional amount
D)the share account for the average per share amount and a loss account for the
Additional amount

Question

Quizplus · Accepted Answer

When shares are reacquired at a cost greater than their original issue price and there is no contributed surplus, the share account is debited for the average per share amount, and retained earnings are debited for the additional amount.

Assuming a Corporation Has No Contributed Surplus Booked, When Shares