Question

A company issues 100, 000 shares of preferred stock for dollar 40 per share. The stock has a fixed dividend rate of 5 percentage and a par value of dollar 3 per share. The company records the issuance with a debit to Cash for: dollar 4 million and a credit to Preferred Stock for dollar 4 million. dollar 300, 000 and a credit to Preferred Stock for dollar 300, 000. dollar 4 million, a credit to Preferred Stock for dollar 300, 000, and a credit to Additional Paid-in Capital for dollar 3.7 million. dollar 300, 000, a debit for dollar 3.7 million to Long-term Investments, a credit to Preferred Stock for dollar 300, 000, and a credit to Additional Paid-in Capital for dollar 3.7 million.