Prepare the journal entries of the repurchases

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Question - On December 31, 2011 Illini had 100 million $1 par common shares outstanding that were originally issued at $6 per share, and a balance of $30 million in PIC treasury. On April 2, 2012 Illini reacquired 10 million shares at $15 per share and on May 15, 2013 Illini reacquired 40 million shares at $25 per share. Illini accounts for reacquired shares using the treasury method and determines the cost by FIFO.

Required -

On December 1, 2015 Illini reissued 5 million treasury shares at $30 per share, and on February 3, 2016 Illini reissued 20 million treasury shares at $10 per share. Prepare the journal entries to record the reissuances on December 1, 2015, and February 3, 2016.

Now assume instead that Illini retired the shares that were repurchased. Prepare the journal entries of the repurchases, assuming the retirement method, on April 2, 2012 and May 15, 2013.

Reference no: EM132942444

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