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Donnie Hilfiger has two classes of stock authorized: $1 par preferred and $0.01 par value common. As of the beginning of 2021, 440 shares of preferred stock and 5,400 shares of common stock have been issued. The following transactions affect stockholders’ equity during 2021:

March		1		Issue 2,500 shares of common stock for $56 per share.
May		15		Purchase 540 shares of treasury stock for $49 per share.
July		10		Resell 340 shares of treasury stock purchased on May 15 for $54 per share.
October		15		Issue 340 shares of preferred stock for $59 per share.
December		1		Declare a cash dividend on both common and preferred stock of $1.90 per share to all stockholders of record on December 15. (Hint: Dividends are not paid on treasury stock.)
December		31		Pay the cash dividends declared on December 1.

Donnie Hilfiger has the following beginning balances in its stockholders’ equity accounts on January 1, 2021: Preferred Stock, $440; Common Stock, $54; Additional Paid-in Capital, $83,000; and Retained Earnings, $33,300. Net income for the year ended December 31, 2021, is $13,600.

Required:

1. 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.)

- Record the issuance of 2,500 shares of common stock for $56 per share.

- Record the purchase of 540 shares of treasury stock for $49 per share.

- Record the resell 340 shares of treasury stock purchased on May 15 for $54 per share.

- Record the issuance of 340 shares of preferred stock for $59 per share.

- Record the declaration of a cash dividend on both common and preferred stock of $1.90 per share to all stockholders. (Hint: Dividends are not paid on treasury stock.)

- Record the entry on December 15.

- Record the cash dividends declared on December 1.

Answer 1

		Debit	Credit
March 01	Cash	65000		=2500*26
	Common Stock		25	=2500*0.01
	Additional Paid in Capital		64975
May 15	Treasury Stock	26460		=540*49
	Cash		26460
July 10	Cash	18360		=340*54
	Treasury Stock		16660	=340*49
	Additional Paid in Capital		1700
October 15	Cash	20060		=340*59
	Preferred Stock		340	=340*1
	Additional Paid in Capital		19720
December 01	Dividends	16112		=(440+5400+2500-540+340+340)*1.90
	Dividends payable		16112
December 15	NO Journal entry required
December 31	Dividends payable	16112
	Cash		16112