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.

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