Assume that John Deere Co. issues 2,000 shares of $100 par, 6% convertible preferred stock for $105

Question:

Assume that John Deere Co. issues 2,000 shares of $100 par, 6% convertible preferred stock for $105 per share. Shareholders have the right to exchange each share of convertible preferred stock for five shares of $10 par common stock. Use the template below to show the financial statement effects of the following events.

a. Issuance of the preferred stock.

b. Declaration and payment of the cash dividend on the preferred stock.

c. Conversion of the preferred stock to common stock when the market value of the common stock is $29 pershare.

Assume that John Deere Co. issues 2,000 shares of $100

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...