Foreman Company is authorized to issue 2,000,000 shares of common stock and 800,000 shares of preferred stock. They issued 500,000 shares of $5 par value common stock for $15 per share and 100,000 shares of 8%, $10 par value preferred stock for $25 per share. How will these transactions be reported in the Stockholders Equity section of the Balance Sheet?

They would increase Common Stock by $7,500,000 and increase the Preferred Stock account by $2,500,000.

They would increase the Common Stock by $2,500,000, increase the Additional Paid-in Capital- Common Stock by $5,000,000 and increase Preferred Stock by $2,500,000.

They would increase the Common Stock by $2,500,000, increase the Accumulated Other Comprehensive Income by $5,000,000 and increase Preferred Stock by $2,500,000.

None of these answers are correct.

They would increase the Common Stock by $2,500,000, increase the Additional Paid-in Capital - Common Stock by $5,000,000, increase Preferred Stock by $1,000,000 and increase Additional Paid-in Capital- Preferred Stock by $1,500,000.