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 49,000 additional shares of $1 par value common stock for $46 per share.

May 10 Repurchases 4,400 shares of treasury stock for $49 per share.

June 1 Declares a cash dividend of $1.20 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 2,200 shares of treasury stock purchased on May 10 for $54 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.)

1. Issues 49,000 additional shares of $1 par value common stock for $46 per share.

2. Repurchases 4,400 shares of treasury stock for $49 per share.

3. Declares a cash dividend of $1.20 per share to all stockholders of record on June 15. (Hint: Dividends are not paid on treasury stock.)

4. Pays the cash dividend declared on June 1.

5. Reissues 2,200 shares of treasury stock purchased on May 10 for $54 per share.

Answer 1

DATE	General Journal	Debit	Credit
1-Mar	Cash 49000*46	2254000
	Common stock		49000
	Paid-in Capital		2205000
10-Mar	Treasury stock	215600
	Cash		215600
	4400*49
1-Jun	Cash dividend	173520
	Dividend payable		173520
	(100000+49000-4400)*1.2
1-Jul	Dividend Payable	173520
	Cash		173520
21-Oct	Cash 2200*54	118800
	Treasury stock 2200*49		107800
	Additional paid-in capital - treasury stock		11000