Nice Corporation issues 40,000 shares of $100 par value preferred stock for cash at $110 per share.The entry to record the transaction will consist of a debit to Cash for $4,400,000 and a credit or credits to
A)Preferred Stock for $4,400,000.
B)Preferred Stock for $4,000,000 and Paid-in Capital in Excess of Par Value-Preferred Stock for $400,000.
C)Preferred Stock for $4,000,000 and Retained Earnings for $300,000.
D)Paid-in Capital from Preferred Stock for $4,400,000.

Question

Quizplus · Accepted Answer

The preferred stock is issued at a premium, so the entry will credit Preferred Stock for the par value ($4,000,000) and the excess amount ($400,000) to Paid-in Capital in Excess of Par Value-Preferred Stock.

Nice Corporation Issues 40,000 Shares of $100 Par Value Preferred