Conversion of Preferred Stock into Common Stock Smith & Sons, Inc., has 20,000 shares of $100 par value, six percent preferred stock and 80,000 shares of $0.50 par value common stock outstanding. The preferred stock is convertible into the company's common stock at a conversion rate of 1-to-20; that is, each share of preferred stock is convertible into 20 shares of common stock. The preferred stock had been sold for its par value when issued. Prepare the journal entry to record the conversion of all of the company's preferred stock into common stock. General Journal Ref. a Preferred Stock Description Common Stock Additional Paid-in-Capital in excess of par value. To record conversion of preferred stock to common stock. + Debit $ 2,000,000 $ 0 0 Credit
Conversion of Preferred Stock into Common Stock Smith & Sons, Inc., has 20,000 shares of $100 par value, six percent preferred stock and 80,000 shares of $0.50 par value common stock outstanding. The preferred stock is convertible into the company's common stock at a conversion rate of 1-to-20; that is, each share of preferred stock is convertible into 20 shares of common stock. The preferred stock had been sold for its par value when issued. Prepare the journal entry to record the conversion of all of the company's preferred stock into common stock. General Journal Ref. a Preferred Stock Description Common Stock Additional Paid-in-Capital in excess of par value. To record conversion of preferred stock to common stock. + Debit $ 2,000,000 $ 0 0 Credit
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter16: Retained Earnings And Earnings Per Share
Section: Chapter Questions
Problem 5P: Alert Companys shareholders equity prior to any of the following events is as follows: The company...
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