ZuoTi.Pro
Question

Why couldnt This Be Easy, Inc. has two issues of securities outstanding: common stock and $5,500,000 face value, 5-year, 3%,
business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1
A B C D E F G
Date Interest payment @ 3% pa on bonds payable interest expenses @ 4% p.a on book value Amortisation of bond discount C - B Debit balance in the account of bond discount Credit balance in the Account "Bonds Payable" Book value of the bonds F - E
1st january 2020 247021 5500000 5252979
30th june 2020 82500 105060 22560 224461 5500000 5275539
1st July 2020 168346 4125000 3956654
31st december 2020 61875 79133 17258 151088 4125000 3973912
30th june 2021 61875 79478 17603 133485 4125000 3991515
31st december 2021 61875 79830 17955 115530 4125000 4009471
30th june 2022 61875 80189 18314 97215 4125000 4027785
31st december 2022 61875 80556 18681 78535 4125000 4046466
30th june 2023 61875 80929 19054 59480 4125000 4065520
31st december 2023 61875 81310 19435 40045 4125000 4084955
30th june 2024 61875 81699 19824 20221 4125000 4104779
31st december 2024 61875 82096 20221 0 4125000 4125000

on 1st july following entry will be passed:

1st July 2020 bonds payable A/c Dr. 1375000
To discount on bonds 56115
To Common stock 1100000
To additional paid in capital account 218885
(Being face value of bonds $ 1375000 is converted In to shares of common stock)
* discounts of bonds
= debit balance of bond discount account as on 30th june 2020/5500000*1375000 = 56115
* common stock
= 1375000/1000*40*20 1100000

Hence paid in capital for common stock will be = common stock + additional paid in capital

= 1100000 + 218885

= $ 1318885

0 0
Add a comment
Know the answer?
Add Answer to:
Why couldn't This Be Easy, Inc. has two issues of securities outstanding: common stock and $5,500,000...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Why couldn't This Be Easy, Inc. has two issues of securities outstanding: common stock and $4,900,000...

    Why couldn't This Be Easy, Inc. has two issues of securities outstanding: common stock and $4,900,000 face value, 5-year, 3%, convertible bonds. The bonds were issued January 1, 2020, for $4.679.926 when the market rate was 4%. Bond interest payment dates are June 30" and December 315. Each bond is convertible into 40 shares of $20 par value common stock. On July 1, 2020, the holders of $1,470,000 face value bonds exercised the conversion privilege. On that date, the bonds...

  • Determine Credit to PIC -C/S

    KSR Inc. has two issues of securities outstanding: common stock and $3,400,000 face value, 5-year, 2%, convertible bonds. The bonds were issued January 1st, 2022, for $3,094,592 when the market rate was 4%. Bond interest payment dates are June 30th and December 31st. Each bond is convertible into 45 shares of $20 par value common stock. On July 1, 2022, the holders of $510,000 face value bonds exercised the conversion privilege. On that date, the bonds were selling at 108...

  • Dadayeva Inc. has $5 million of 6% convertible bonds outstanding. Each $1,000 bond is convertible into...

    Dadayeva Inc. has $5 million of 6% convertible bonds outstanding. Each $1,000 bond is convertible into 50 no par value common shares. The bonds pay interest on January 31 and July 31. On July 31, 2020, the holders of $1,250,000 of these bonds exercised the conversion privilege. On that date, the market price of the bonds was 110, the market price of the common shares was $40, the carrying value of the common shares was $20, and the Contributed Surplus—Conversion...

  • Carla Vista Inc. has $2 million of 7% convertible bonds outstanding. Each $1,000 bond is convertible...

    Carla Vista Inc. has $2 million of 7% convertible bonds outstanding. Each $1,000 bond is convertible into 20 no par value common shares. The bonds pay interest on January 31 and July 31. On July 31, 2020, the holders of $640,000 of these bonds exercised the conversion privilege. On that date, the market price of the bonds was 112, the market price of the common shares was $59, the carrying value of the common shares was $30, and the Contributed...

  • Vaughn Manufacturing has $3890000 of 7% convertible bonds outstanding. Each $1,000 bond is convertible into 30...

    Vaughn Manufacturing has $3890000 of 7% convertible bonds outstanding. Each $1,000 bond is convertible into 30 shares of $30 par value common stock. The bonds pay interest on January 31 and July 31. On July 31, 2021, the holders of $1280000 bonds exercised the conversion privilege. On that date the market price of the bonds was 105 and the market price of the common stock was $37. The total unamortized bond premium at the date of conversion was $288000. Vaughn...

  • 14-18 que common lue of the bond paymes nd the amount paid is a common stock...

    14-18 que common lue of the bond paymes nd the amount paid is a common stock was so lling for $90 per share corporation uses the str dis was splin per stare, the sur 3. Prepit 114-17 Convertible Bonds On January 1, 2011 LO 14.7 corporation issued S10 million of 10% convertible deben AICPA holder of each $1,000 bond to convert it into six shares of the corporal Adented debentures were issued for SIT million. At the time of issuance,...

  • On January 1, 2018, ABC & Co. issues convertible bonds with a maturity of 5 years....

    On January 1, 2018, ABC & Co. issues convertible bonds with a maturity of 5 years. The par value of the bonds is $400,000, the coupon rate is 6%, and the compounding period is semi-annual with interest paid on June 30th and December 31st. The market prices these bonds using an interest rate (effective rate) of 4% compounded semi-annually. Each $1,000 bond is convertible to 100 shares of ABC & Co. common stock. 1. On July 1, 2018, the company...

  • Instructions On July 1, 2020, Tuttle Company had bonds payable outstanding with a face value of...

    Instructions On July 1, 2020, Tuttle Company had bonds payable outstanding with a face value of $350,000 and a book value of $345,000. The interest on these bonds was paid on June 30. When these bonds were issued, each $1,000 bond was convertible into 20 shares of $10 par common stock. To induce conversion, on June 15, 2020, the terms were changed so that each bond was convertible into 22 shares of common stock if the conversion was made within...

  • On July 1, 20x3, Anadarko Co. had twenty-year bonds payable outstanding with a face value of...

    On July 1, 20x3, Anadarko Co. had twenty-year bonds payable outstanding with a face value of $500,000 and a carrying value of $480,000. Interest of 5 percent is paid semi-annually on January 1 and July 1. The bonds mature on July 1, 20x13, and each $1,000 bond is convertible into 20 common shares (par value = $10). Assume that discount or premium is amortized by the straight-line method. Give the journal entry needed under each of the following independent assumptions....

  • On January 1, 2019, when its $30 par value common stock was selling for $80 per...

    On January 1, 2019, when its $30 par value common stock was selling for $80 per share, Blossom Corp. issued $12,200,000 of 8% convertible debentures due in 20 years. The conversion option allowed the holder of each $1,000 bond to convert the bond into five shares of the corporation’s common stock. The debentures were issued for $13,176,000. The present value of the bond payments at the time of issuance was $10,370,000, and the corporation believes the difference between the present...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT