If Shares of Preferred Stock Are Sold at Par Value

question 131

Multiple Choice

If shares of preferred stock are sold at par value for cash, the transaction would be entered by:

• A)debiting Cash and crediting Preferred Stock.
• B)debiting Preferred Stock and crediting Cash.
• C)debiting Cash and crediting Paid-in Capital in Excess of Par.
• D)debiting Paid-In Capital in Excess of Par and crediting Preferred Stock.

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Definitions:

Alkanes

Saturated hydrocarbons consisting of carbon and hydrogen atoms with single bonds between carbons, known for their stability and lack of reactivity.

Unsaturated Hydrocarbons

Organic compounds that contain at least one carbon–carbon double or triple bond, characterized by their ability to undergo addition reactions.

Organic Compounds

Chemical compounds containing carbon atoms, bonded mainly to hydrogen, oxygen, or nitrogen atoms, and which are the basis of all living organisms' structures and functions.

Bicyclic Alkane

A type of organic compound that contains two rings, which are made entirely of carbon and hydrogen atoms, sharing one or more common carbon atoms.