Ross Island Co

question 133

Multiple Choice

Ross Island Co.issues 10,000 shares of no-par value preferred stock for cash at $120 per share.The journal entry to record the transaction will consist of a debit to Cash for $1,200,000 and a credit (or credits) to:

• A)Preferred Stock for $1,200,000.
• B)Preferred Stock for $40,000 and Additional Paid-in Capital for $1,160,000.
• C)Preferred Stock for $40,000 and Retained Earnings for $1,160,000.
• D)Retained Earnings for $1,200,000.