The shareholders' equity section of Winters Company contained the following balances as of December 31, 2010:
During 2011, Winters entered into the following transaction: On May 13, the company repurchased 55 shares of its common stock in the open market at $25 per share. Which of the following would be included in the journal entry for May 13?
a. a debit to Cash for $1,375.
b. a credit to Common Stock for $1,375.
c. a debit to Common Stock for $1,375.
d. a debit to Treasury Stock for $1,375.
Definitions:
Balance Sheet
A report detailing a company's assets, liabilities, and shareholders' equity at a particular moment, providing an overview of its financial health.
Unearned Rent
Unearned rent is money received by a landlord for rent that has not yet been earned because the rental period has not occurred. It is recorded as a liability until the period passes.
Adjusting Entry
A journal entry made at the end of an accounting period to allocate income and expenditures to the correct period.
Depreciation Expense
A technique for spreading out the expense of a physical asset throughout its lifespan.
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