Discussion:Accounting entry for S-Corp when buying back shareholders stock
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Discussion Forum Index --> Accounting Questions --> Accounting entry for S-Corp when buying back shareholders stock
| 23 January 2008 | |
| My husbands S Corporation (Architectural firm with 5 employees) had 2 shareholders who owned 80/20 %. The Corporation bought the 20% shareholders stock at an amount pretermined in the original subscribtion agreement. My question is how to I enter the transaction? I'm unsure as to whether there is an entry for paid in capital or whether the difference between cash and par value all goes to R.E.
Debit Capital Stock = Par value Debit Paid in capital = Amount 20% shareholder paid Debit Retained Earnings = Balance Credit = Cash amount | |
| January 23, 2008 | |
| It sounds like treasury stock might come into play here. | |
| 24 January 2008 | |
| If there was paid in capital when purchased then the redemption would include an entry to paid in capital. | |
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