Pechstein Corporation issued 2,090 shares of $13 par value common stock upon conversion of 1,070 shares of $45 par value preferred stock. The preferred stock was originally issued at $58 per share. The common stock is trading at $26 per share at the time of conversion. Record the conversion of the preferred stock.

Preferred Stock 48,150 debit

Additional Paid In PS 13,910 debit

Common Stock 27,170 credit

Additioanl Paid. in CS 34,890 credit

Explanation:

2,090 shares x $13 = $27,170

Preferred stock 1,070 x $45 = $48,150

Additional Paid. in Preferred stock 1,070 x (58 - 45) = 13,910

The common stock will use additional paid. in for the differnece between the value of the preferred stock and the new common stock