If a Corporation Repurchases 500 Shares of Its Previously-Issued Common

Multiple Choice

If a corporation repurchases 500 shares of its previously-issued common stock then retires these shares, which of the following is true?

A) A new class of stock must be issued in place of the 500 retired shares.
B) Approval from the state is required for this type of transaction.
C) A gain or loss must be recorded, depending on the difference between the repurchase cost and the original issue price.
D) The common stock and paid-in capital accounts must be decreased by the amount of the original issue price.