When you are repurchasing stock previously issued under the par method, why and when do you make a debit to Retained Earnings? I know you:
Dr. Treasury Stock (Shares purchased x par value)
Cr. Cash (Shares purchase x purchase price)
But the Dr. to APIC I thought was the only plug or the number of shares purchased x (purchase price - par value), however, a few examples show to split this amount between APIC - common and Retained Earnings. How do you come up with the Retained Earnings portion?