A company issued 1,000 shares of $1 par value preferred stock for $5 per share.What is true about the journal entry to record the issuance?

Name: A company issued 1,000 shares of $1 par value preferred stock for $5 per share.What is true about the journal entry to record the issuance?
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Question

Quizplus · Accepted Answer

The preferred stock is recorded at par value, so $1,000 is credited to Preferred Stock (1,000 shares x $1 par value). The remaining $4,000 (1,000 shares x $4 premium) is credited to Additional Paid-In Capital.

A Company Issued 1,000 Shares of $1 Par Value Preferred