Question

Bonita Ltd. issues 8,100, $6 cumulative preferred shares at $62 each and 15,000 common shares at $30 each at the beginning of 2019. Each preferred share is convertible into two common shares. During the years 2020 and 2021, the following transactions affected Bonita's shareholders' equity accounts:

2020
Jan.	10		Paid $13,000 of annual dividends to preferred shareholders.
2021
Jan.	10		Paid annual dividend to preferred shareholders and a $3,700 dividend to common shareholders.
Mar.	1		The preferred shares were converted into common shares.

Journalize each of the transactions. (Credit account titles are automatically indented when the 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.)

Date	Account Titles and Explanation	Debit	Credit
2020 Jan . 10
	(To record preferred share dividend.)

Date	Account Titles and Explanation	Debit	Credit
2021 Jan. 10
	(To record common and preferred share dividends.)
Mar. 1
	(To record conversion of shares.)

Answer 1

Journal entries are as follows:

Date	Account and Explanation	Debit($)	Credit($)
Jan.10 20	Dividend on preferred shareholders	13,000
	Cash		13,000
	(Recorded the payment of the preferred shareholders )
Jan.10 21	Dividend on preferred shareholders	13,000
	Cash		13,000
	(Recorded the payment of the preferred shareholders )
Jan.10 21	Dividend on common sharesholders	3,700
	Cash		3,700
	(Recorded the payment of the common shareholders )
Mar.1 21	Preferred shares (8,100 * 2)	16,200
	Common shares		16,200
	(Recorded the conversion Preferred shares to Common shares)