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

question 27

Multiple Choice

A company issues 1 million shares of preferred stock with a par value of $2 at its market price of $26 per share.The issuance should be recorded with a debit to Cash for:

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

---

Definitions:

Searching

The process of looking for or systematically investigating a subject or area of interest in order to find specific information.

Situational Loss

A type of grief or emotional pain that occurs due to a specific situation or change in circumstances, such as losing a job or divorce.

Life Insurance

A contract between an insurer and an insured, where the insurer promises to pay a designated beneficiary a sum of money upon the death of the insured person.

Funeral Expenses

Costs associated with the burial or cremation and memorial services of a deceased individual.