The correct answer is B. Debit cash and credit Treasury stock and paid in capital from Treasury stock.
If the treasury stock is being reused for more than what it was supposed to be in the acquisition cost the amount of cash which is in excess is being credited from Treasury Stock from Paid-in capital.
If it is reused for less amount then what we got out of the deductions is being debited from previous transactions of treasury stock to the account of paid-in capital.
If the balance which has remained in the previous stock is insufficient then the difference goes to be charged to the retained earnings.
Answer:
after-tax cost odf debt 0.035 = 3.5%
Explanation:
the debt provides a tax shield for companies, as the interest expense, decrease the net income. Interest decrease income and therefore, the tax income associate with the income.
So the cost of debt with taxes is lower, because it lower the income tax expense
<u>the formula will be:</u>
cost of debt ( 1 - tax-rate)
<u>in this case:</u>
0.05 ( 1 - 0.3) = 0.05 x 0.7 = 0.035