Logan Corporation issues 70000 shares of $50 par value preferred stock for cash at $60 per share.Recording the transaction will consist of an increase to Cash for $4200000 and an increase(s) to

Question

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The preferred stock is issued at a price of $60 per share, which is $10 more than the par value of $50. Therefore, the company receives $10 per share as paid-in capital in excess of par value. The total amount of paid-in capital in excess of par value is calculated as follows: ($60 - $50) x 70,000 = $700,000. The remaining $3,500,000 is recorded as an increase to Preferred Stock. Therefore, the correct answer is Choice B.

Logan Corporation Issues 70000 Shares of $50 Par Value Preferred