Prepare the journal entry on date of conversion

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Problem - On September 20, 2018 The Tanta Company issued 100,000 shares of $50 par value, 10% cumulative dividends convertible preferred stock for $60 per share. Dividends for 2019 and 2020 are in arears. Each preferred share is convertible into 10 common shares that have a $2 par value. On 7/1/2021, holders of 50% of the Preferred Stockholders converted their shares into common stock. On that date the market value of the common stock was $90 per share.

Required -

1. Prepare the journal entry on date of issuance.

2. Prepare the journal entry on date of conversion.

Reference no: EM132878911

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