Conversion of Preferred Stock into Common Stock Evans & Sons, Inc., has 20,000 shares of $100 par value, six percent preferred stock and 100,000 shares of $1.00 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. Description Debit Credit a. Answer Answer Answer Answer Answer Answer Additional Paid-in-Capital in excess of par value. Answer Answer To record conversion of preferred stock to common stock.

Conversion of Preferred Stock into Common Stock Evans & Sons, Inc., has 20,000 shares of $100 par value, six percent preferred stock and 100,000 shares of $1.00 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. Description Debit Credit a. Answer Answer Answer Answer Answer Answer Additional Paid-in-Capital in excess of par value. Answer Answer To record conversion of preferred stock to common stock.

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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General Journal
a.	Answer	Answer	Answer
	Answer	Answer	Answer
	Additional Paid-in-Capital in excess of par value.	Answer	Answer
	To record conversion of preferred stock to common stock.

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Alert Companys shareholders equity prior to any of the following events is as follows: The company is considering the following alternative items: 1. An 8% stock dividend on the common stock when it is selling for 30 per share. 2. A 30% stock dividend on the common stock when it is selling for 32 per share. 3. A special stock dividend to common shareholders consisting of 1 share of preferred stock for every 100 shares of common stock. The preferred stock and common stock are selling for 123 and 31 per share, respectively. 4. A 2-for-1 stock split on the common stock, reducing the par value to 5 per share (assume the same date for declaration and issuance). The market price is 30 per share on the common stock. 5. A property dividend to common shareholders consisting of 100 bonds issued by West Company. These bonds are carried on the Alert Company books as an available-for sale investment at a fair value of 48,000 (which is also its cost); it has a current value of 54,000. 6. A cash dividend, consisting of a normal dividend and a liquidating dividend, on both the preferred and the common stock. The 10% preferred dividend includes a 2% liquidating dividend, and the 2.30 per share common dividend includes a 0.30 per share liquidating dividend (separate liquidating dividend contra accounts should be used). Required: For each of the preceding alternative items: 1. Record (a) the journal entry at the date of declaration and (b) the journal entry at the date of issuance. 2. Compute the balances in the shareholders equity accounts immediately after the issuance (any gains or losses are to be reflected in the retained earnings balance; ignore income taxes).
Raun Company had the following equity items as of December 31, 2019: Preferred stock, 9% cumulative, 100 par, convertible Paid-in capital in excess of par value on preferred stock Common stock, 1 stated value Paid-in capital in excess of stated value on common stock| Retained earnings The following additional information about Raun was available for the year ended December 31, 2019: 1. There were 2 million shares of preferred stock authorized, of which 1 million were outstanding. All 1 million shares outstanding were issued on January 2, 2016, for 120 a share. The preferred stock is convertible into common stock on a 1-for-1 basis until December 31, 2025; thereafter, the preferred stock ceases to be convertible and is callable at par value by the company. No preferred stock has been converted into common stock, and there were no dividends in arrears at December 31, 2019. 2. The common stock has been issued at amounts above stated value per share since incorporation in 2002. Of the 5 million shares authorized, 3,580,000 were outstanding at January 1, 2019. The market price of the outstanding common stock has increased slowly but consistently for the last 5 years. 3. Raun has an employee share option plan where certain key employees and officers may purchase shares of common stock at 100% of the marker price at the date of the option grant. All options are exercisable in installments of one-third each year, commencing 1 year after the date of the grant, and expire if not exercised within 4 years of the grant date. On January 1, 2019, options for 70,000 shares were outstanding at prices ranging from 47 to 83 a share. Options for 20,000 shares were exercised at 47 to 79 a share during 2019. During 2019, no options expired and additional options for 15,000 shares were granted at 86 a share. The 65,000 options outstanding at December 31, 2019, were exercisable at 54 to 86 a share; of these, 30,000 were exercisable at that date at prices ranging from 54 to 79 a share. 4. Raun also has an employee share purchase plan whereby the company pays one-half and the employee pays one-half of the market price of the stock at the date of the subscription. During 2019, employees subscribed to 60,000 shares at an average price of 87 a share. All 60,000 shares were paid for and issued late in September 2019. 5. On December 31, 2019, there was a total of 355,000 shares of common stock set aside for the granting of future share options and for future purchases under the employee share purchase plan. The only changes in the shareholders equity for 2019 were those described previously, the 2019 net income, and the cash dividends paid. Required: Prepare the shareholders equity section of Rauns balance sheet at December 31, 2019. Substitute, where appropriate, Xs for unknown dollar amounts. Use good form and provide full disclosure. Write appropriate notes as they should appear in the publisher financial statements.
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 Debit + $ 2,000,000 $ + Common Stock Additional Paid-in-Capital in excess of par value. To record conversion of preferred stock to common stock. 0 0 Credit
A company issued for $78 per share, 17 shares of $43 par value convertible preferred stock. One share of preferred stock can be converted into 4 shares of the company’s $36 par value common stock. Assume that all of the preferred stock was converted into common stock, and the market value of the common stock at the date of the conversion was $30 per share. This conversion will affect Retained Earnings by $_________. (Do NOT put plus or minus sign in front of the amount. If the conversion does not affect Retained Earnings, then enter 0).
On March 1, 20X5, Rya Corp. issued 1,000 shares of its $20 par value common stock and 2,000 shares of its $20 par value convertible preferred stock for a total of $80,000.At this date, Rya's common stock was selling for $36 per share, and the convertible preferred stock was selling for $27 per share.What amount of the proceeds should be allocated to Rya's convertible preferred stock?
The C Corp. sold 1,000 shares of $700 par, 5%, Convertible Preferred Stock for $103. The preferred stock is also Callable at $104. The preferred is convertible at 1 to 3, Common Stock has a par value of $10. Prepare journal entries for the following. a. Record the sale of the Preferred Stock for cash. b. Declared the yearly dividend on the Preferred Stock. c, Paid the dividend declared d. Called and retired 100 shares of Preferred Stock. e. 100 shares of Preferred were Converted to Common Stock.
Bramble Corporation issued 2,200 shares of $10 par value common stock upon conversion of 1,100 shares of $50 par value preferred stock. The preferred stock was originally issued at $57 per share. The common stock is trading at $25 per share at the time of conversion.Record the conversion of the preferred stock.
Bridgeport Inc.’s $9 par value common stock is actively traded at a market price of $15 per share. Bridgeport issues 4,800 shares to purchase land advertised for sale at $71,500.Journalize the issuance of the stock in acquiring the land. What is the date? What is credit or debit? What is the title or explanation?
Echo Company issued a unit for $50. It combines 1 common share with 1 preferred share. At the time of issue the market price of the preferred shares traded at $30 per share and the common shares traded at $15. What is the cost base of the preferred and common shares? What is the cost base of the preferred and common shares from each unit? O a) $30 for the preferred share and $15 for the common. b) $45 for the preferred share and $45 for the common. c) $45 for the preferred share and $13.50 for the common. d) $33.33 for the preferred share and $16.67 for the common.
Vaughn Corporation sold 390 shares of treasury stock for $55 per share. The cost for the shares was $45. The entry to record the sale will include a O credit to Treasury Stock for $21450. O credit to Paid-in Capital from Treasury Stock for $3900. O debit to Paid-in Capital in Excess of Par for $3900. O credit to Gain on Sale of Treasury Stock for $17550.
Skysong Corporation issued 1,900 shares of $10 par value common stock upon conversion of 950 shares of $50 par value preferred stock. The preferred stock was originally issued at $60 per share. The common stock is trading at $24 per share at the time of conversion.Record the conversion of the preferred stock.
A company issued 18,000 shares of $25 par value common stock upon conversion of 27,000 shares of $35 par value preferred stock. The preferred stock was originally issued at $40 per share. The common stock is trading at $15 per share at the time of conversion. In the journal entry to record the conversion of the preferred stock, how much should we record for Paid-in Capital in Excess of Par – common stock?

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General Journal
Ref.	Description	Debit	Credit
a.	Answer	Answer	Answer
	Answer	Answer	Answer
	Additional Paid-in-Capital in excess of par value.	Answer	Answer
	To record conversion of preferred stock to common stock.