In 2004, Rona Corp. issued 5,000 shares of $10 par value common stock for $100 per share. In 2006, Rona reacquired 2,000 of its shares at $150 per share from the estate of one of its deceased officers and immediately canceled these 2,000 shares. Rona uses the cost method in accounting for its treasury stock transactions. In connection with the retirement of these 2,000 shares, Rona should debit

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Additional paid-in capital

Retained earnings

a.

$ 20,000

$280,000

b.

$100,000

$180,000

c.

$180,000

$100,000

d.

$280,000

$0