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 a.Paid-In Capital from Preferred Stock for $750,000 b.Preferred Stock for $500,000 and Retained Earnings for $250,000 c.Preferred Stock for $500,000 and Paid-In Capital in Excess of Par—Preferred Stock for $250,000 d.Preferred Stock for $750,000

Answer 1

b) Preferred Stock for $500,000.00 and Paid-In Capital in Excess of Par-Preferred Stock for $250,000.00

Step-by-step explanation:

Based on the information given The Appropriate journal entry to record the transaction will consist of a debit to Cash for $750,000 and a credit or credits to PREFERRED STOCK FOR $500,000.00 and PAID-IN CAPITAL IN EXCESS OF PAR-PREFERRED STOCK FOR $250,000.00

Dr Cash $750,000

(10,000 shares *$75)

Cr Preferred Stock for $500,000.00

(10,000 shares *$50)

Cr Paid-In Capital in Excess of Par-Preferred Stock for $250,000.00

($750,000-$500,000]