1. Before cancellation or transfer, the shares repurchased by the company are managed as treasury shares, and all expenses for repurchasing shares are included in the cost of treasury shares.
Borrow: Stock.
Credit: cash and other subjects
2. When the treasury shares are cancelled, the corresponding share capital shall be reduced according to the number of cancelled shares. If the cost of treasury shares is higher than the corresponding share capital, the capital reserve fund, surplus reserve fund and undistributed profits of previous years shall be written off in turn; For the part lower than the corresponding share capital, increase the capital reserve fund.
Borrow: paid-in capital
Debit: capital reserve-capital premium, surplus reserve, profit distribution-undistributed profit.
Loans: Stock in stock
or
Borrow: paid-in capital
Loan: capital reserve-capital premium
Loans: Stock in stock
3. When treasury shares are transferred, the capital reserve fund will be increased for the part where the transfer income is higher than the cost of treasury shares; The part that is lower than the cost of treasury shares shall be offset by capital reserve fund, surplus reserve fund and undistributed profit of previous years in turn.
Debit: bank deposit
Debit: capital reserve-capital premium, surplus reserve, profit distribution-undistributed profit.
Loans: Stock in stock
or
Debit: bank deposit
Loan: capital reserve-capital premium
Loans: Stock in stock