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 200,000 shares of issued common stock and 10,000 shares of treasury stock purchased for $18 a share as of the beginning of 2018. Power Drive has the following transactions affecting stockholders' equity in 2018: March 1 Issues 25,000 additional shares of S1 par value common stock for $18 per share. May 10 Purchases an additional 6,000 shares of treasury stock for $20 per share. June 1 June 15. Record each of these transactions. [5.4 points] Cred Debit Account Date Page 13

Explanation / Answer

Journal entries :

Date accounts & explanation debit credit Mar 1 Cash a/c (25000*18) 450000 Common stock a/c (25000*1) 25000 Paid in capital in excess of par value-common stock 425000 (TO record issuance of common stock) May 10 Treasury stock a/c (6000*20) 120000 Cash a/c 120000 (TO record purchase of treasury stock) June 1 Dividend a/c (209000*1) 209000 Dividend payable a/c 209000 (To record dividend declared) June 15 No entry

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