At December 31, 2020, Elkhart Corporation has $1,000,000 worth of $100 par value preferred stock issued. Each preferred share is convertible into 20 shares of Elkhart’s $1 par value common stock. The preferred stock was originally issued at $135 per share.

On March 1, 2021, half of the preferred shares were converted to common shares. At the time of the conversion, the market value of the common stock was $55 per share.   

Record the conversion of the preferred stock. (4 points)