Fire Red Company Is Authorized to Issue 20000 Shares of 8

Short Answer

Fire Red Company is authorized to issue 20000 shares of 8% $100 par value preferred stock and 1000000 shares of no-par common stock with a stated value of $1 per share. If Fire Red issues 10000 shares of preferred stock for land with an asking price of $1020000 and a market value of $1080000 which of the following would be the journal entry for Fire Red to record? a.
$\begin{array}{llr} \text {Land } &1,000,000\\ \text { Preferred Stock} &&1,000,000\\\end{array}$


b.
$\begin{array}{llr} \text { Land } &1,080,000\\ \text { Preferred Stock } &&1,080,000\\\end{array}$


c.
$\begin{array}{llr} \text { Land} &1,200,000\\ \text { Preferred Stock } &&1,000,000\\ \text { Paid-in Capital in Excess of Par-Preferred} &&200,000\end{array}$


d.
$\begin{array}{llr} \text {Land } &1,080,000\\ \text { Preferred Stock} &1,000,000\\ \text {Paid-in Capital in Excess of Par-Preferred } &80,000\end{array}$