Question

"The Sneed Corporation issues 10,000 shares of $50 par preferred stock for cash at $75 per share. The entry to record the transaction will consist of a debit to Cash for $750,000 and a credit or credits to"

Answer 1

Answer:

Explanation:

The journal entry to record the issuance of common stock is shown below:

Cash A/c Dr $750,000        (10,000 shares  × $75)

    To Preferred Stock $500,000        (10,000 shares × $50)

    To  Additional Paid-in Capital in excess of par - Preferred stock $250,000

(Being the issuance of stock is recorded and the remaining balance is credited to the additional paid-in capital account)

While issuing the stock, we debited the cash account and credited the preferred stock and additional paid-in capital account