On January 5, 2007, Holmes purchased 1 million treasury shares for $9 million. Immediately after the purchase of the shares, the balances in the paid-in capital— excess of par and retained earnings accounts are:
A) Paid-in capital - excess of par: $540; Retained earnings: $280
B) Paid-in capital - excess of par: $540; Retained earnings: $272
C) Paid-in capital - excess of par: $534; Retained earnings: $278
D) Paid-in capital - excess of par: $532; Retained earnings: $280
Answer: A
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