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 61,000 additional shares of $1 par value common stock for $58 per share.

May 10 Repurchases 5,600 shares of treasury stock for $61 per share.

June 1 Declares a cash dividend of $1.80 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 2,800 shares of treasury stock purchased on May 10 for $66 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

Journal entries:

Cash dividend{(100,000+61000-5600)×$1.80}

Date account titles debit credit March 1 Cash(61000×$58) $3,538,000 Common stock(61000×$1) $61,000 Paid in capital(61000×$57) $3,477,000 (To record the issuance of common stock) May 10 Treasury stock(5600×$61) $341,600 Cash $341,600 (To record the purchase of Treasury stock) June 1

Cash dividend{(100,000+61000-5600)×$1.80}

$279,720 Dividend payable $279,720 (To record declaration of cash dividend) July 1 Dividend payable $279,720 Cash $279,720 (To record payment of cash dividend) Oct 21 Cash(2800×$66) $184,800 Treasury stock(2800×$61) $170,800 Additional paid in capital-treasury stock(2800×$5) $14,000 (To record reissue of Treasury stock)

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