Druffle Industries Issues 5,000 Shares of $100 Par, 7% Noncumulative

question 22

Multiple Choice

Druffle Industries issues 5,000 shares of $100 par, 7% noncumulative, nonparticipating preferred stock at par. The correct journal entry to record this stock issue is:

• A)Debit Cash $35,000; credit Preferred Stock $35,000.
• B)Debit Preferred Stock $35,000; credit Cash $35,000.
• C)Debit Cash $535,000; credit Preferred Stock $500,000; credit Paid-in Capital in Excess of Par Value, Preferred Stock $35,000.
• D)Debit Cash $535,000; credit Preferred Stock $535,000.
• E)Debit Cash $500,000; credit Preferred Stock $500,000.

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