In 2019, Algiers Inc. issued 10,000 no par value convertible preferred shares for $ 103 each. One preferred share can be converted into three shares of Algiers' no par value common shares at the option of the shareholder. In August 2020, all of the preferred shares were converted into common shares. The market value of the common shares at the date of the conversion was $ 30 per share. What amount should be credited to Common Shares as a result of this conversion?
A) $ 300,000
B) $ 500,000
C) $ 900,000
D) $ 1,030,000

Question

Quizplus · Accepted Answer

The amount credited to Common Shares is the original issue price of the preferred shares, which is $103 each for 10,000 shares, totaling $1,030,000.