The shareholders’ equity section of the balance sheet of TNL Systems Incorporated included the following accounts at December 31, 2023:

Shareholders' Equity	($ in millions)
Common stock, 230 million shares at $1 par	$ 230
Paid-in capital—excess of par	1,840
Paid-in capital—share repurchase	1
Retained earnings	1,400

Required:

1. During 2024, 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.
   1. On February 5, 2024, TNL Systems purchased 6 million shares at $11 per share.
   2. On July 9, 2024, the corporation sold 2 million shares at $13 per share.
   3. On November 14, 2026, the corporation sold 2 million shares at $8 per share.
2. Prepare the shareholders’ equity section of TNL Systems’ balance sheet at December 31, 2026, comparing the two approaches. Assume all net income earned in 2024–2026 was distributed to shareholders as cash dividends.

Complete this question by entering your answers in the tabs below.

• Req 1 Retired
• Req 1 Treasury Stock
• Req 2

Prepare the entries for both the purchase and subsequent resale for the above transactions of the shares assuming the shares are retired.

Note: 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).

Journal entry worksheet

• Record the purchase of 6 million shares at $11 per share assuming the shares are retired.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
February 05, 2024	Treasury stock	66
	Cash		66

Answer rating: 100% (QA)

When TNL Systems Incorporated purchases its own sha... View the full answer