Power Drive Corporation designs and produces a line of golf equipment and golf a

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 2018. Power Drive has the following transactions affecting stockholders' equity in 2018.

March 1 Issues 65,000 additional shares of $1 par value common stock for $62 per share.

May 10 Repurchases 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 Reissues 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, select "No journal entry required" in the first account field.)

Explanation / Answer

Date Accounts Title and Explanation Debit Credit Mar. 1 Cash (65,000 shares x $62) $4,030,000         Common Stock (65000 shares x $1) $65,000         Additional Paid-in Capital (difference) $3,965,000 May. 10 Treasury Stock (6,000 shares x $65) $390,000               Cash $390,000 Jun.1 Dividends (165,000 shares x $2) $330,000                  Dividend Payable $330,000 Jul.1 Dividends Payable (165,000 shares x $2) $330,000                         Cash $330,000 Oct.21 Cash (3,000 shares x $70) $210,000                  Treasury Stock (3000 shares x $65) $195,000                   Additional Paid-in Capital (3000 x $5) $15,000

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