Reference no: EM132791097

Stellbert Inc. ("Stellbert") had the following shareholders' equity account balances on January 1, 2005:

Common shares, 1,000,000 shares authorized, 70,000 shares issued $700,000 Preferred shares, $3 cumulative, 100,000 shares authorized, 5,000 shares issued $50,000 Retained earnings $400,000 All of the Common shares had been issued at one public offering in 2002. The last dividends declared for the common and preferred shares were for the year ended December 31st, 2003.

Problem 1: Prepare the required journal entries

The following transactions took place during 2005: On January 29th, the company bought and retired (cancelled) 10,000 of the company's own common shares for $9 per share