On January 1, 2016 Howard Corporation Issued 1,000 Shares of $100

On January 1, 2016 Howard Corporation issued 1,000 shares of $100 par convertible preferred stock for $125 per share. On January 15, 2018 all shares are converted to common stock.
Required:
1) Record the January 1, 2016 issuance of the preferred stock.
2) Record the January 15, 2018 to convert the preferred stock to common based upon the following stated contract information:
a.) at a price of $155 per share
a.) each share is convertible into 5 shares of $15 par common stock.
b.) at a price of $120 per share
b.) each share is convertible into 11 shares of $15 par common stock.
3) What if the preferred stock was callable instead of convertible. Prepare the journal entries to recall the stock:

Correct Answer:

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