Use the following information for questions
Fair Corporation issues 7,500 preferred shares for $25 per share.
-The entry to record the transaction will consist of a debit to Cash for $187,500 and a credit or credits to
A)Preferred Shares for $187,500.
B)Preferred Shares for $100,000 and Share Capital for $87,500.
C)Preferred Shares for $100,000 and Retained Earnings for $87,500.
D)Investment in Preferred Shares for $187,500.

Question

Use the following information for questions 
Fair Corporation issues 7,500 preferred shares for $25 per share.
-The entry to record the transaction will consist of a debit to Cash for $187,500 and a credit or credits to
A)Preferred Shares for $187,500.
B)Preferred Shares for $100,000 and Share Capital for $87,500.
C)Preferred Shares for $100,000 and Retained Earnings for $87,500.
D)Investment in Preferred Shares for $187,500.

Quizplus · Accepted Answer

The correct entry for issuing preferred shares is to debit Cash for the total amount received ($187,500, calculated as 7,500 shares * $25 per share) and credit Preferred Shares for the same amount, reflecting the increase in equity from the issuance of shares.

Use the Following Information for Questions