Question

Multiple Choice Question 107 Sheffield Corporation issues 10100 shares of $50 par value preferred stock for cash at $75 per share. The entry to record the transaction wil consist of a debit to Cash for $757500 and a credit or credits to Preferred Stock for $505000 and Paid-in Capital in Excess of Par-Preferred Stock for $252500 Preferred Stock for $252500 and Paid-in Capital from Preferred Stock for $505000 Preferred Stock for $757500 Paid-in Capital from Preferred Stock for $757500 Click if you would like to Show Work for this question: Open Show Work

Answer 1

Correct Journal entry

General Journal	Debit	Credit
Cash	$ 757,500.00
Preferred Stock		$ 505,000.00
Paid in capital in excess of Par-Preferred stock		$ 252,500.00

Option 1 is correct.

Cash received in excess of par value is credited to paid in capital in excess of Par account. Par value is credited with Preferred stock account and cash is debited with whole cash proceeds.