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) 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

Question

Quizplus · Accepted Answer

Total cash raised through the issue of shares = Number of shares issued × Par value of the stock = 10,000 × $50 = $500,000
Paid-In Capital in Excess of Par-Preferred Stock = $750,000 - $500,000 = $250,000

The Sneed Corporation Issues 10,000 Shares of $50 Par Preferred