Question

Sneed Corporation issues 12,200 shares of $46 par preferred stock for cash at $61 per share. The entry to record the transaction will consist of a debit to Cash for $744,200 and a credit or credits to

a.Preferred Stock for $744,200.

b.Preferred Stock for $561,200 and Paid-In Capital in Excess of Par—Preferred Stock for $183,000.

c.Preferred Stock for $561,200 and Retained Earnings for $183,000.

d.Paid-In Capital from Preferred Stock for $744,200.

Answer 1

The Journal entry shall be:
Account titles and explanation		Debit(in $)	Credit(in $)
Cash(12,200 shares*$61)		7,44,200
Preferred Stock(12,200 shares*$46)			5,61,200
Paid-in capital in excess of par value-Preferred share(12,200 shares*$15)			1,83,000
So Option B is answer