Logan Corporation issues 70,000 shares of $50 par value preferred stock for cash at $60 per share.The entry to record the transaction will consist of a debit to Cash for $4,200,000 and a credit or credits to
A)Preferred Stock for $4,200,000.
B)Preferred Stock for $3,500,000 and Paid-in Capital in Excess of Par Value-Preferred Stock for $700,000.
C)Preferred Stock for $3,500,000 and Retained Earnings for $700,000.
D)Paid-in Capital from Preferred Stock for $4,200,000.

Question

Quizplus · Accepted Answer

The preferred stock is credited for its par value (70,000 shares x $50 = $3,500,000), and the excess over par value ($60 - $50 = $10 per share) is credited to Paid-in Capital in Excess of Par Value-Preferred Stock ($700,000).

Logan Corporation Issues 70,000 Shares of $50 Par Value Preferred