Exam-Wesk 5(ncludes x c CSecure https/mybusinesscourse.com/platform/mod/quiz/att

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Exam-Wesk 5(ncludes x c CSecure https/mybusinesscourse.com/platform/mod/quiz/attempt.php attempt-17177448pagess Customire Links Free HotmailWindows Macketplac Windows Media Windows D E Menu LICK HERE TO REIEW LEARNING OB ECTIVES QUESTION 6 Anuaer savedPaints out of s.0o ag question Conversion of Preferred Stock into Common Stock Groff & Sors, Inc, has 27,000 shares of $50 par value, 9 percent The preferred stock is convertible into the company's common stock at a conversion rate of 1-to-40: convertible into 40 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 preferred stock and 100,000 shares of $1.00 par value common stock outstandin General Journal Credit Ref. 1.) Preferred Stock Common Stock Additional Paid-in-Capital in excess of par value To record conversion of preferred stock to common stock Previous page OIl 4 8

Explanation / Answer

Journal entry :

Ref Description Debit credit 1 Preferred stock (27000*50) 1350000 Common stock (27000*40*1) 1080000 Additional paid in capital in excess of par value 270000 (To record conversion of stock)

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