Brief Exercise 16-3 Bridgeport Corporation issued 1,800 shares of $10 par value

Question

Brief Exercise 16-3

Bridgeport Corporation issued 1,800 shares of $10 par value common stock upon conversion of 900 shares of $50 par value preferred stock. The preferred stock was originally issued at $54 per share. The common stock is trading at $28 per share at the time of conversion.

Record the conversion of the preferred stock. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation

Debit

Credit

Account Titles and Explanation

Debit

Credit

Explanation / Answer

Account title Debit Credit Preferred stock 45000 Additional paid in capital - preferred stock 3600 Common stock 18000 Additional paid in capital - common stock 30600 900 preferred shares of $50 par , issued @$54 per share. Par value = 900 x 50   =45,000 Additional paid in capital = 900 x 4 = 3,600 1,800 common stock of $10 par Par value = 1,800 x 10 = 18,000 The balance of $30,600 ($45,000 + $3,600 - $18,000)

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