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12 January, 01:57

Sarasota 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 $64 per share. The common stock is trading at $25 per share at the time of conversion. Record the conversion of the preferred stock.

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  1. 12 January, 03:12
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    Journal entry

    Explanation:

    The journal entry is as follows

    Preferred Stock $55,000 (1,100 shares * $50)

    Paid in capital Preferred Stock $15,400 {1,100 shares * ($64 - $50) }

    To Common Stock $22,000 (2,200 shares * $10)

    To Paid in capital common stock Additional $48,400

    (Being the conversion of the preferred stock is recorded
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