On January 1, 2020, Castaway Corp. issued 5,000 shares of preferred stock ($15 par value) at $45 per share. Each share of preferred stock is convertible into 2 shares of common stock ($1 par value) at the option of the holder. On September 1, 2020, preferred shareholders holding 2,000 shares of preferred stock converted the stock to common shares when the common stock was trading at $20 per share. The entry recorded by Castaway Corp. on September 1, 2020, would include the following: A debit to Retained Earnings for $10,000. A debit to Loss on Conversion for $10,000. A credit to Paid-in Capital in Excess of Par—Common Stock for $86,000. A credit to Paid-in Capital in Excess of Par—Common Stock for $60,000.