Preferred Stock Journal Entries

The preferred stock journal entries below act as a quick reference, and set out the most commonly encountered situations when dealing with the double entry posting of preferred stock transactions.

In each case the term deposit journal entries show the debit and credit account together with a brief narrative. For a fuller explanation of journal entries, view our examples section.

Typical Preferred Stock Journal Entries


Issue of preferred stock
Account Debit Credit
Cash XXX
Preferred stock XXX
APIC – Preferred stock XXX

APIC = Additional Paid in Capital


Dividend declared on preferred stock
Account Debit Credit
Preferred stock dividend XXX
Dividend payable XXX

 

Dividend paid on preferred stock
Account Debit Credit
Dividend payable XXX
Cash XXX

Conversion of preferred stock
Account Debit Credit
Preferred stock XXX
APIC – Preferred stock XXX
Common stock XXX
APIC – Common stock XXX

Calling of preferred stock
Account Debit Credit
Preferred stock XXX
APIC – Preferred stock XXX
Retained earnings XXX
Cash XXX

Redemption of preferred stock
Account Debit Credit
Preferred stock XXX
APIC – Preferred stock XXX
Retained earnings XXX
Cash XXX
Last modified July 16th, 2019 by Michael Brown

About the Author

Chartered accountant Michael Brown is the founder and CEO of Double Entry Bookkeeping. He has worked as an accountant and consultant for more than 25 years in all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a BSc from Loughborough University.

You May Also Like