Norton Company Issues 4,000 Shares of Its $5 Par Value

Multiple Choice

Norton Company issues 4,000 shares of its $5 par value common stock having a fair value of $25 per share and 6,000 shares of its $15 par value preferred stock having a fair value of $20 per share for a lump sum of $210,000. What amount of the proceeds should be allocated to the preferred stock?

A) $171,818
B) $131,250
C) $114,545
D) $95,454