A corporation received a subscription for 1,000 shares of 10 percent, $100 par-value preferred stock at $103 a share. The entry to record this transaction consists of a debit to Subscriptions Receivable-Preferred for $103,000 and a credit to:

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The credit should be recorded for the Preferred Stock Subscribed amount of $100,000, which is the par value of the preferred stock. The difference between the subscription price ($103) and the par value ($100) is a premium that represents additional paid-in capital, which should be credited to Paid-in Capital in Excess of Par Value-Preferred Stock for $3,000. Therefore, the correct entry to record this transaction is a debit to Subscriptions Receivable-Preferred for $103,000, a credit to Preferred Stock Subscribed for $100,000, and a credit to Paid-in Capital in Excess of Par Value-Preferred Stock for $3,000.

A Corporation Received a Subscription for 1,000 Shares of 10