The shareholders’ equity section of the balance sheet of TNL Systems Inc. included the following accounts at December 31, 2015:

Shareholders' Equity	($ in millions)
Common stock, 260 million shares at $1 par	$	260
Paid-in capital—excess of par		2,080
Paid-in capital—share repurchase		2
Retained earnings		1,600

Required:

1.

During 2016, TNL Systems reacquired shares of its common stock and later sold shares in two separate transactions. Prepare the entries for both the purchase and subsequent resale of the shares assuming the shares are (a) retired and (b) viewed as treasury stock. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)

a.	On February 5, 2016, TNL Systems purchased 8 million shares at $12 per share.
b.	On July 9, 2016, the corporation sold 3 million shares at $14 per share.
c.	On November 14, 2018, the corporation sold 3 million shares at $9 per share.

Record the purchase of 8 million shares at $12 per share assuming the shares are retired.

Then:

Record the purchase of 8 million shares at $12 per share assuming the shares are viewed as treasury stock.

All with the same dates as above

2.	Prepare the shareholders’ equity section of TNL Systems’ balance sheet at December 31, 2018, comparing the two approaches. Assume all net income earned in 2016–2018 was distributed to shareholders as cash dividends. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)

Answer rating: 100% (QA)

Solution 1 Journal Entries a Assuming Shares are retired In millions No Date A... View the full answer