Question

Power Drive Corporation designs and produces a line of golf equipment and golf apparel. Power Drive has 100,000 shares of common stock outstanding as of the beginning of 2021. Power Drive has the following transactions affecting stockholders' equity in 2021.

March		1		Issues 56,000 additional shares of $1 par value common stock for $53 per share.
May		10		Purchases 5,100 shares of treasury stock for $56 per share.
June		1		Declares a cash dividend of $1.55 per share to all stockholders of record on June 15. (Hint: Dividends are not paid on treasury stock.)
July		1		Pays the cash dividend declared on June 1.
October		21		Resells 2,550 shares of treasury stock purchased on May 10 for $61 per share.

Required:
Record each of these transactions. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

Date	General Journal	Debit	Credit
Mar-01	Cash (56,000*$53)	$   2,968,000
	Common stock (56,000*$1)		$        56,000
	Paid in capital in excess of par		$   2,912,000
May-10	Treasury stock (5,100*$56)	$      285,600
	Cash		$      285,600
Jun-01	Cash Dividends (156,000-5,100)*$1.55)	$ 233,895
	Dividend payable		$        233,895
Jul-01	Dividend payable	$        233,895
	Cash		$        233,895
Oct-21	Cash (2,550*$61)	$      155,550
	Treasury stock (2,550*$56)		$      142,800
	Paid in capital from treasury stock		$        12,750

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