Witt Oil issued 100,000 shares of cumulative, nonparticipating preferred stock with a par value of $100 and a stated dividend of 7%. The shares sold for $96 per share. The journal record for this transaction would be

Dr Cash$9,600,000

Dr Paid-in Capital in Excess of Par - Preferred Stock$400,000

Cr Preferred Stock$10,000,000

Explanation:

Since Witt Oil issued 100,000 shares and preferred stock with a par value of $100 in which the shares sold for $96 per share this means we have to Debit Cash with $9,600,000, Debit Paid-in Capital in Excess of Par - Preferred Stock $400,000 and Credit Preferred Stock$10,000,000

Dr Cash$9,600,000

(100,000 Shares * $96 per shares)

Dr Paid-in Capital in Excess of Par - Preferred Stock$400,000

(10,000,000 - $9,600,000)

Cr Preferred Stock$10,000,000

($100,000 * per value 100)