Answered: Sunshine Corp. was organized on Jan. 1…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Sunshine Corp. was organized on Jan. 1 with authorization of 20,000 shares of $5 preferred stock, $100 par, and 200,000 shares of $25 par common stock. Indicate the account that should be recorded in the Description column of the Journal item (1) as the debit account and the dollar amount in the amount columns assuming that Sunshine Corp on Jan . 15 received cash for the issuance of 2,000 shares of preferred stock at par value.

JOURNAL

Date	Description	P.Ref	DEBIT	CREDIT
Jan. 15	(1)		(?)
	(2)			(?)
	(2)			(?)

Group of answer choices

Preferred Stock debit $200,000

Paid-In Capital in Excess Par - Preferred Stock debit for $10,000

Cash debit for $200,000

Cash debit for $10,000

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