The Journal Entry to Record the Transaction Will Consist of a Debit

question 70

Multiple Choice

The journal entry to record the transaction will consist of a debit to Cash for $600,000 and a credit (or credits) to:

• A) Preferred Stock for $600,000.
• B) Preferred Stock for $500,000 and Additional Paid-In Capital for $100,000.
• C) Preferred Stock for $500,000 and Retained Earnings for $100,000.
• D) Investment in Fonthouse Stock for $600,000.

---

Definitions:

Liability

The legal responsibility for one's actions or omissions, especially concerning the payment of damages or compliance with the law.

Garage Owner

An individual or entity that owns an establishment where vehicles are serviced, repaired, or housed.

Refund Of Premium Payments

This refers to the process where an insurance company returns a portion of the premium paid by the insured, often due to policy cancellation or adjustments.

Cancelled

Indicating that an event, order, service, or agreement has been terminated or called off.