Assume that MIKE, Inc. has outstanding $1,000,000 par value debentures convertible into 100,000 shares of $1 par value common stock. Mike, Inc. wishes to reduce its annual interest cost. To do so, Mike agrees to pay the holders of its convertible debentures additional $80,000 if they will convert. Assuming conversion occurs, Make the entries to show the conversion

Assume that General Motors issues 1,000 shares of $10 par value common stock having a market price of $20 a share, and 1,000 shares of preferred stock, par value of $10 with a market value of $12 a share, for a lump sum of 40,000

REQUIRED: Determine the amount to be allocated to COMMON and PREFERRED STOCKS