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 |
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.
