Fonthouse Corporation Issues 10,000 Shares of No-Par Preferred Stock for Cash

question 2

Multiple Choice

Fonthouse Corporation issues 10,000 shares of no-par preferred stock for cash at $60 per share. The journal entry to record the transaction will consist of a debit to Cash for $600,000 and a credit (or credits) to:

• A)Preferred Shares for $600,000.
• B)Preferred Shares for $500,000 and Additional Paid-In Capital for $100,000.
• C)Preferred Shares for $500,000 and Retained Earnings for $100,000.
• D)Investment in Fonthouse Shares for $600,000.

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Definitions:

Assimilate

The process by which an individual or group adopts the cultural traits or social patterns of another group, often losing aspects of their original identity.

American Society

A broad term referring to the social structure, cultural norms, and collective behaviors of the people living in the United States.

Native Americans

Indigenous peoples of the United States, including American Indians and Alaska Natives, with unique cultures, traditions, and histories.

Disharmony

A state of discord or conflict, often resulting from differences in beliefs, interests, or values.