A Company Issues 100,000 Shares of Preferred Stock for $40

question 85

Multiple Choice

A company issues 100,000 shares of preferred stock for $40 per share.The stock has a fixed dividend rate of 5% and a par value of $3 per share.The company records the issuance with a debit to Cash for:

• A) $4 million and a credit to Preferred Stock for $4 million.
• B) $300,000 and a credit to Preferred Stock for $300,000.
• C) $4 million, a credit to Preferred Stock for $300,000, and a credit to Additional Paid-in Capital for $3.7 million.
• D) $300,000, a debit for $3.7 million to Long-term Investments , a credit to Preferred Stock for $300,000, and a credit to Additional Paid-in Capital for $3.7 million.

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Definitions:

Crossing The Rockies

The act of traversing the Rocky Mountains, which was a significant barrier to westward expansion in the United States during the 19th century.

Settlers

Individuals or groups who move to uninhabited or sparsely populated lands to establish a permanent presence.

Journey Westward

The movement or migration of people towards the western regions of a country or continent, often associated with exploration, expansion, or the pursuit of new opportunities.