(Multiple Choice) Jaden Inc. has 10,000 preferred shares, originally issued for $1 each, that are now being converted to common shares. The market value of each preferred share is $2, and the market value of each common share is $2.50. In this transaction:   1. Preferred Shares is debited by $10,000   2. Common Shares is credited by $25,000   3. Preferred Shares is debited by $20,000   4. Common Shares is debited by $10,000   5. None of the answers are correct

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A: Hi student Since there are multiple questions, we will answer only first question.

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Stockholder's Equity

The stockholders’ equity (often referred to as the book value of the company) is the number of assets available to the stockholder after its entire liabilities is paid off. The stockholders’ equity is also sometimes referred to as owner's equity. The stockholders’ equity or book value generally includes common stock, treasury stock retained earnings. It is an indicator of a company's financial strength and is an important item on the company's balance sheet.