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 65,000 additional shares of $1 par value common stock for $62 per share. May 10 Purchases 6,000 shares of treasury stock for $65 per share. June 1 Declares a cash dividend of $2.00 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 3,000 shares of treasury stock purchased on May 10 for $70 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.) View transaction list Journal entry worksheet 2 3 4 5 Record the issuance of 65,000 additional shares of $1 par value common stock for $62 per share. Note: Enter debits before credits. General Journal Debit Credit Date March 01, 2021 Record entry View general journal Clear entry

Answer 1

No.	Date	General Journal	Debit	Credit
1	March 01, 2021	Cash                                                       [Total cash received = 65,000 shares x $62]	$4,030,000
		Common Stock                                    [Total par value = 65,000 shares x $1]		$65,000
		Additional Paid-in capital                  [65,000 shares x ($62 - $1)]		$3,965,000
2	May 10, 2021	Treasury stock                                        [6,000 shares x $65]	$390,000
		Cash		$390,000
3	June 1, 2021	Cash dividend                         [Refer working note 1]	$318,000
		Dividend Payable		$318,000
4	July 1, 2021	Dividend Payable	$318,000
		Cash		$318,000
5	October 21, 2021	Cash                                                         [3,000 shares x $70]	$210,000
		Treasury stock                                      [Cost = 3,000 shares x $65]		$195,000
		Additional paid-in capital                  [Gain = 3,000 shares x ($70 - $65)]		$15,000