Answer-a-Journal Entry
Date | Account Title and Explanation | Debit ($) | Credit ($) |
Cash | 12,096,000 | ||
Premium on bonds payable | 896,000 | ||
Bonds Payable | 11,200,000 | ||
(To record the issuance of convertible bonds) |
b-
Date | Account Title and Explanation | Debit ($) | Credit ($) |
Bonds payable ($11,200,000*30%) | 3,360,000 | ||
Premium on bonds payable ($896,000*30%)-($896,000*30%*2/20) | 241,920 | ||
Common Stock ($11,200,000/ 1,000)*30%*10 Shares*$15 | 504,000 | ||
Paid in capital in excess of par-Common Stock ($3,360,000+$241,920-504,000) | 3,097,920 | ||
(To record conversion of debentures into common stock under book value method) |
On January 1, 2019, when its $30 par value common stock was selling for $80 per...
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