The XYZ Corporation Sells 1 Million Shares of $2 Par

question 77

Essay

The XYZ Corporation sells 1 million shares of $2 par value common stock, for $17 per share. One year later, the corporation repurchases 100,000 shares at a market price of $14 a share. One year after that, it reissues the 100,000 shares at a market price of $22 a share.
For each transaction, prepare the journal entry and show the effect on assets, liabilities and stockholders'
equity.

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Definitions:

Polyisobutylene

A synthetic rubber, or elastomer, made from the polymerization of isobutylene, used in a variety of applications including sealants and adhesives.

Cyclic Product

A chemical compound that forms a ring structure during a chemical reaction.

Ring Closing Metathesis

A form of metathesis reaction that forms cyclic compounds by the rearrangement of carbon-carbon double bonds.

Octa-1,7-diene

An organic compound with the formula C8H14, characterized by a linear chain of eight carbon atoms with double bonds at the first and seventh positions.