In 20X7, Lilly Compact Inc. (LCI) issued 1,000 convertible preferred shares. Each share is convertible into one common share. The proceeds received on the issuance of the preferred shares totalled $200,000. In 20X9, these shares were converted to common shares when the fair value of the common shares was $275.00 per share. The preferred shares were selling for $250.00 at this same time. Which of the following is the correct journal entry to record the issuance of these common shares? Dr. Preferred shares Dr. Contributed surplus Cr. Common shares $200,000 $75,000 $275,000 Dr. Preferred shares Cr. Gain on conversion Cr. Common shares $250.000 $50,000 $200,000 $200,000 Dr. Preferred shares Cr. Common shares $200.000 $250.000 Dr. Preferred shares Cr. Common share