Fonthouse Corporation issues 10,000 shares of no-par preferred stock for cash at $60 per share. The journal entry to record the transaction will consist of a debit to Cash for $600,000 and a credit (or credits)to:
A)Preferred Shares for $600,000.
B)Preferred Shares for $500,000 and Additional Paid-In Capital for $100,000.
C)Preferred Shares for $500,000 and Retained Earnings for $100,000.
D)Investment in Fonthouse Shares for $600,000.

Question

Quizplus · Accepted Answer

This preferred stock has no-par value,so the entire amount received is credited to Preferred Stock.Debit Cash (10,000 F1F1F1S1F1F1F10 $60)= $600,000 and Credit Preferred Shares 600,000.

Fonthouse Corporation Issues 10,000 Shares of No-Par Preferred Stock for Cash