500 shares of 6%, $100 par callable preferred stock are called at $101. The shares were issued at $103 per share. The journal entry to record the retirement includes which of the following?

	Cr. paid in capital from retirement of preferred stock, $1,000.
	Dr. paid in capital from retirement of preferred stock $1,500.
	Cr. retained earnings $1,000
	Dr. preferred stock $51,500

This Answer is Correct (A, CR paid in capital from retirement of preferred stock $1,000)

The $2 difference multiplied by 500 shares yields $1,000 paid in capital kept by the firm. The journal entry is:

DR:	Preferred stock 500($100)		50,000
DR:	PIC-preferred 500($103 $100)		1,500
	CR: PIC-retirement of preferred			1,000
	CR: Cash 500($101)			50,500

Question:

Can please explain why credit paid in capital of preferred stock $1,000 is answer because I don't understand the journal entries above? Please try explain the journal entries above and the answer as easy as possible.