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Convertible Preferred Stock

Instructions X

General Journal Shaded cells have feedback. X

On January 2, 2016, Bray Corporation issues 900 shares of $100 par convertible preferred stock for $117 per share. On January 7, 2017, all the preferred shareholders

convert their shares to common stock.

How does grading work?

PAGE 1
Required:
1. Prepare the January 2, 2016, journal entry to recordGENERAL JOURNAL
the issuance of the preferred stock. Score: 37/37

2. Prepare the January 7, 2017, journal entry to record the conversion, assuming the preferred stock contract states that:
DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT
a. each share of✔ preferred stock is convertible into 7 shares of $10 par common
✔ stock ✔
1 Jan. 2 Cash   105,300.00
b. each share of preferred stock is convertible into 12 shares of $10 par common
✔ stock ✔
2 Preferred Stock   90,000.00
✔ ✔
3 Additional Paid-in Capital on Preferred Stock   15,300.00

Points: 7/7

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