PQR Inchad 1,000 Common Shares Outstanding with a Par Value of of $10

PQR Inc.had 1,000 common shares outstanding with a par value of $10 per share.There was $20,000 of contributed surplus arising from previous retirements of shares in this class.Assume that half of these shares were retired for $14 per share.The journal entry to record this transaction would include:

A) a debit to retained earnings of $40,000.
B) a credit to retained earnings of $40,000.
C) a debit to retained earnings of $20,000 and a debit to contributed surplus of $20,000.
D) an income statement loss of $40,000.

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