Question

A company issues 1 million shares of preferred stock with a par value of $2 at its market price of $26 per share. The issuance should be recorded with a debit to Cash for:

A) $26 million and a credit to Preferred Stock for $26 million.

B) $2 million and a credit to Preferred Stock for $2 million.

C) $26 million, a credit to Additional Paid-in Capital for $2 million, and a credit to Preferred Stock for $24 million.

D) $26 million, a credit to Preferred Stock for $2 million, and a credit to Additional Paid-in Capital for $24 million.

Answer

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