A corporation received a subscription for 1,000 shares of 10 percent, $100 par-value preferred stock at $103 a share. The entry to record this transaction consists of a debit to Subscriptions Receivable—Preferred for $103,000 and a credit to:

Choices are: 

1.) Preferred Stock for $100,000 and a credit to Retained Earnings for $3,000. 

2.) Preferred Stock Subscribed for $100,300. 

3.) Preferred Stock Subscribed for $100,000 and a credit to Paid-in Capital in Excess of Par Value—Preferred Stock for $3,000. 

4.) Preferred Stock Subscribed for $100,000 and a credit to Gain on Sale of Preferred Stock for $3,000.

Answer rating: 100% (QA)

Journal Entry to Record the Subscription ... View the full answer