Chapter 16: Q3BE. (page 874)
Pechstein Corporation issued 2,000 shares of \(10 par value common stock upon conversion of 1,000 shares of \)50 par value preferred stock. The preferred stock was originally issued at \(60 per share. The common stock is trading at \)26 per share at the time of conversion. Record the conversion of the preferred stock
Short Answer
Debit, Preferred Stock, and Paid-in Capital in Excess of Par— Preferred stock with $50,000 and $10,000, respectively. Credit the Common Stock and Paid-in Capital in Excess of Par—Common Stock with $20,000 and $40,000.