On January 3, 2016, Maris Corporation issued 4,000 shares of $50 par convertible preferred stock at $95 per share. Each share is convertible into four shares of $10 par common stock. Required: a. Prepare the journal entry to record the issuance of the stock on January 3, 2016. b. On March 5, 2018, each share of preferred was converted. Prepare the journal entry to record this conversion. c. Assume that instead of the above circumstances regarding conversion, the company agrees to convert each share of preferred into ten shares of $10 par common stock on March 5, 2018. Prepare the journal entry to record this conversion.
On January 3, 2016, Maris Corporation issued 4,000 shares of $50 par convertible preferred stock at $95 per share. Each share is convertible into four shares of $10 par common stock. Required: a. Prepare the journal entry to record the issuance of the stock on January 3, 2016. b. On March 5, 2018, each share of preferred was converted. Prepare the journal entry to record this conversion. c. Assume that instead of the above circumstances regarding conversion, the company agrees to convert each share of preferred into ten shares of $10 par common stock on March 5, 2018. Prepare the journal entry to record this conversion.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
| On January 3, 2016, Maris Corporation issued 4,000 shares of $50 par convertible |
| Each share is convertible into four shares of $10 par common stock. |
| Required: |
| a. Prepare the |
| b. On March 5, 2018, each share of preferred was converted. Prepare the journal entry to |
| record this conversion. |
| c. Assume that instead of the above circumstances regarding conversion, the company agrees |
| to convert each share of preferred into ten shares of $10 par common stock on March 5, |
| 2018. Prepare the journal entry to record this conversion. |
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