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Prepare the journal entries for the issuance and conversion

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Reference no: EM132948902

Khaki Co. issued 80,000 shares of 5%, $100 par, convertible preferred stock on April 20, 2025 at 104. Each share of preferred stock is convertible into 10 shares of $2 stated value common stock. The commons stock market price was $15 on January 1, $22 on November 15th, $21 on December 31 and had an average price of $18.

On November 15th, 2025, 30,000 shares of the preferred stock were converted.

Problem 1: Prepare the journal entries for the issuance and conversion of the convertible preferred stock.

Reference no: EM132948902

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