Redemption of preferred stock journal entry
The redemption might be at the discretion of the stockholder or can sometimes be mandatory. Since the business can be forced to redeem the preferred equity stock it is usually considered to be more a form of debt than equity. The journal entry to post the redemption of the preferred stock is similar to that shown above for callable preferred stock. Preferred Stock Journal Entries. The preferred stock journal entries below act as a quick reference, and set out the most commonly encountered situations when dealing with the double entry posting of preferred stock transactions. In each case the term deposit journal entries show the debit and credit account together with a brief narrative.