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 November 12th, 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 and has built financial models for 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 degree from Loughborough University.
