Fonthouse Corporation Issues 10,000 Shares of No-Par Preferred Stock for Cash

Multiple Choice

Fonthouse Corporation issues 10,000 shares of no-par preferred stock for cash at $60 per share. The journal entry to record the transaction will consist of a debit to Cash for $600,000 and a credit (or credits) to:

A) Preferred Shares for $600,000.
B) Preferred Shares for $500,000 and Additional Paid-In Capital for $100,000.
C) Preferred Shares for $500,000 and Retained Earnings for $100,000.
D) Investment in Fonthouse Shares for $600,000.