Use the following information for questions
Air Ace Corporation issues 5,000 preferred shares for $40 per share.
-The entry to record the transaction will consist of a debit to Cash for $200,000 and a credit or credits to
A)Preferred Shares for $200,000.
B)Preferred Shares for $150,000 and Share Capital for $50,000.
C)Preferred Shares for $150,000 and Retained Earnings for $50,000.
D)Investment in Preferred Shares for $200,000.

Question

Use the following information for questions 
Air Ace Corporation issues 5,000 preferred shares for $40 per share.
-The entry to record the transaction will consist of a debit to Cash for $200,000 and a credit or credits to
A)Preferred Shares for $200,000.
B)Preferred Shares for $150,000 and Share Capital for $50,000.
C)Preferred Shares for $150,000 and Retained Earnings for $50,000.
D)Investment in Preferred Shares for $200,000.

Quizplus · Accepted Answer

The correct entry is to credit Preferred Shares for the total amount received, which is $200,000 (5,000 shares x $40 per share).

Use the Following Information for Questions