The following information was taken from the statement of shareholders' equity of Carnival Industries:
$\begin{array}{|l|r|r|}
\hline & 2017 &2 0 1 6\
\hline \text { Preferred stock (no par) } & \$ 900 & \$ 400 \
\hline \text { Common stock ( } \$ 1 \text { par value) } & 1,000 & 900 \
\hline \text { Additional paid-in capital: } & & \
\hline \text { Common stock } & 40 & 20 \
\hline \text { Treasury stock } & 10 & -- \
\hline \text { Less: Treasury stock } & 130 & 150 \
\hline
\end{array}$

The journal entry to record the issuance of preferred stock during 2017 would include:

Question

The following information was taken from the statement of shareholders' equity of Carnival Industries:
$\begin{array}{|l|r|r|}
\hline & 2017 &2 0 1 6\
\hline \text { Preferred stock (no par) } & \$ 900 & \$ 400 \
\hline \text { Common stock ( } \$ 1 \text { par value) } & 1,000 & 900 \
\hline \text { Additional paid-in capital: } & & \
\hline \text { Common stock } & 40 & 20 \
\hline \text { Treasury stock } & 10 & -- \
\hline \text { Less: Treasury stock } & 130 & 150 \
\hline
\end{array}$

The journal entry to record the issuance of preferred stock during 2017 would include:

Quizplus · Accepted Answer

The increase in preferred stock from 2016 to 2017 is from $400 to $900, indicating an issuance of $500 in preferred stock. This would be recorded as a credit to Preferred Stock for $500.

The Following Information Was Taken from the Statement of Shareholders