Question

On January 1, 2021, Madison Products issued $41.7 million of 6%, 10-year convertible bonds at a net price of $42.67 million. Madison recently issued similar, but nonconvertible, bonds at 99 (that is, 99% of face amount). The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 30 shares of Madison's no par common stock. Madison records interest by the straight line method On June 1 2023. Madison notified bondholders of its intent to call the bonds at face value plus a 1% call premium on July 1, 2023. By June 30, all bondholders had chosen to convert the bonds into shares as of the Interest payment date. On June 30, Madison paid the semiannual interest and issued the requisite number of shares for the bonds being converted Required: 1. & 2. Prepare the journal entries for the issuance of the bonds by Madison and interest payment for June 30, 2021 3. Prepare the journal entries for the June 30, 2023. Interest payment by Madison and the conversion of the bonds (book value method earch

Answer 1

Inswer page-01 Required Lianol 42670000 fun 30 9700001 jowinal entries Rate account of title explanation Debit. Gredit 20311.coub. convertible bonds payable 41400000 Apaemiuem en bands payable 970000 By voal interest expense :- 202500 Premium on bonds pewable 12) 48500 cash. ( 41700000 x 38.1 June 30 6. 2033 interest expense 1202500 pucmium on bonds payable ( 48500 cash ( 41400000 x 3.1.) convertible bonds payable pacium on boods payible ( 20 )x15 727500 common stock 42421500 12 51000 1970000 1251000 4700000 1970000 -