A Company Issues 1 Million Shares of Preferred Stock with a Par

question 142

Multiple Choice

A company issues 1 million shares of preferred stock with a par value of $2 and a market price of $26 per share.The issuance should be recorded as:

• A)a debit to Cash of $26 million and a credit to Preferred Stock of $26 million.
• B)a debit to Cash of $2 million and a credit to Preferred Stock of $2 million.
• C)a debit to Cash of $26 million,a credit to Additional Paid-in Capital of $2 million,and a credit to Preferred Stock of $24 million.
• D)a debit to Cash of $26 million,a credit to Preferred Stock of $2 million,and a credit to Additional Paid-in Capital of $24 million.

---

Definitions:

Consciously Aware

Being fully aware of one's thoughts, feelings, and environment in the present moment.

Automatic Attitudes

Immediate and instinctive evaluations that occur without conscious awareness towards people, objects, or issues.

Evaluative Responses

Positive or negative reactions, judgments, or assessments made in response to a particular stimulus or situation.

Broad Assortment

A wide or extensive range of different items, types, or categories, often presented together for choice or comparison.