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 52,000 additional shares of $1 par value common stock for $49 per share. May 10 Purchases 4,700 shares of treasury stock for $52 per share. June 1 Declares a cash dividend of $1.35 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 2,350 shares of treasury stock purchased on May 10 for $57 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 52,000 additional shares of $1 par value common stock for $49 per share. NILI . -L- LL -L E --- ---- -

Answer 1

Journal Entries:

Power Drive Corporation:

Date	General Journal	Debit	Credit
Mar. 1, 2021	Cash (52,000 shares *$49 per share)	$2,548,000
	Common Stock (52,000 shares * $1 per share)		$52,000
	Additional Paid-in Capital ($49 - $1 = $48 * 52,000 shares)		$2,496,000
	(To record the issue of shares at value more than par value)
May. 10, 2021	Treasury Stock (4,700 shares * $52 per share)	$244,400
	Cash		$244,400
	(To record the purchase of treasury stock)
Jun. 1, 2021	Dividends (100,000 shares + 52,000 shares - 4,700 shares = 147,300*$1.35 per share)	$198,855
	Dividends Payable		$198,855
	(To record the declaration of dividends on common stock)
Jul. 1, 2021	Dividends Payable	$198,855
	Cash		$198,855
	(To record the payment of cash dividends)
Oct. 21, 2021	Cash (2,350 shares * $57 per share)	$133,950
	Treasury Stock (2,350 shares * $52 per share)		$122,200
	Additional Paid-in Capital ($57 - $52 = $5 * 2,350 shares)		$11,750
	(To record resell of treasury stock for cash)

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