Exercise $10-6($Acquisition of Treasury Shares and Conversion of Preference Shares into Ordinary Shares$)$

Jazul Company had the following equity balances reported in its December $31,2013$ statement of financial position

$10,000,10\%$ Preference Share Capital, convertible, P$100$ par, P$1,000,000$

$500,000$ Ordinary Share Capital, P$5$ stated value, P$2,500,000$

Preference Share Premium, P$200,000$

Paid$-$in capital in Excess of Stated Value, P$1,500,000$

Retained Earnings, P$1,200,000$

During $2014,$ the following transactions relating to share capital have taken place:

a$.5,000$ ordinary shares were reacquired at P$10.$ Subsequently, $4,000$ shares were reissued at P$12$ per share and the $1,000$ shares were reissued at P$7$ per share.

b$.1,000$ preference shares were converted into ordinary shares. $\text{'}$ Ten ordinary shares were issued for every preference share converted.

Instructions:

Prepare journal entries to record the preceding transactions.

State the number of preference shares and ordinary shares issued and outstanding.