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I am working through Chapter 11 Corporations Organization Stock Transactions Div. I am looking at page 66 of 97, Ex 289 and Sol 289.
I am working through Chapter 11 Corporations Organization Stock Transactions Div. I am looking at page 66 of 97, Ex 289 and Sol 289. I understand all of the entries for each of the dates where a transaction occurred, except for the last date on September 1, 2018 where 3,000 treasury shares are sold at $5 per share. I have the first two ledger entries correct with a debit to Cash 15,000 and a debit to Paid-In Capital from Treasury Stock 4,500. The Sol shows a debit to Retained Earnings 1,500 and a credit to Treasury Stock 21,000. Although I see the credit to Treasury Stock is the sum of the prior 3 entries, I do not understand how Retained Earnings of 1,500 were calculated or where this number comes from. Can someone please explain this part? Thank you.
