Business Finance

Discuss the following:

  • The difference between the cost, par and constructive retirement method.
  • For the cost and par value methods, prepare journal entry examples of each using the following information:
    • 1000 shares of $5 par stock were sold for $7.
    • 500 shares were repurchased at a price of $6.
    • The 500 shares were later sold for $3500.
  • For the constructive retirement method prepare the following journal entry:
    • The shares were retired.
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