The Sneed Corporation issues 10,000 shares of $50 par preferred stock for cash a
ID: 2334085 • Letter: T
Question
The Sneed Corporation issues 10,000 shares of $50 par preferred stock for cash at $75 per share. The entry to record the transaction will consist of a debit to Cash for $750,000 and a credit or credits to
Preferred Stock for $750,000
Preferred Stock for $500,000 and Paid-In Capital in Excess of Par—Preferred Stock for $250,000
Preferred Stock for $500,000 and Retained Earnings for $250,000
Paid-In Capital from Preferred Stock for $750,000
a.Preferred Stock for $750,000
b.Preferred Stock for $500,000 and Paid-In Capital in Excess of Par—Preferred Stock for $250,000
c.Preferred Stock for $500,000 and Retained Earnings for $250,000
d.Paid-In Capital from Preferred Stock for $750,000
Explanation / Answer
Journal:
Cash a/c..Dr$750,000(10000 shares@$75)
To preferred stock $500,000(10000 shares@$50)
To Paid-In Capital in Excess of Par—Preferred Stock $250000
Hence the correct option is B.
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