since the bond payable:- 520000
premium on bond = 7500
currently no. of bond = 520,000/1000 = 520 number of bonds (since one bond costs $1000)
each bond is covertible into 20 shares
i.e. 1 bond = 20 preferred stock
so 520 bond = 520*20=10400 preferred stock
PARTICULAR | DEBIT | CREDIT |
Bonds Payable | 520000 | |
Premium on Bonds Payable. | 7500 | |
Preferred stock (10400*50) | 520000 | |
Paid-in Capital in Excess of Par | 7500 |
premium on bond amount will automatically become premium for preferred stock.
BACK Exercise 16-3 Swifty Company has bonds payable outstanding in the amount of $520,000, and the...
Exercise 16-03 Cullumber Company has bonds payable outstanding in the amount of $480,000, and the Premium on Bonds Payable account has a balance of $9,300. Each $1,000 bond is convertible into 20 shares of preferred stock of par value of $50 per share. All bonds are converted into preferred stock. Assuming that the book value method was used, what entry would be made? (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry...
Vaughn Company has bonds payable outstanding in the amount of $440,000, and the Premium on Bonds Payable account has a balance of $7,400. Each $1,000 bond is convertible into 20 shares of preferred stock of par value of $50 per share. All bonds are converted into preferred stock. Assuming that the book value method was used, what entry would be made? (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required,...
Brief Exercise 16-02 Ivanhoe Corporation has outstanding 1,700 $1,000 bonds, each convertible into 70 shares of $10 par value common stock. The bonds are converted on December 31, 2020, when the unamortized discount is $26,900 and the market price of the stock is $21 per share. Record the conversion using the book value approach. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles...
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Flounder Corporation has outstanding 1,800 $1,000 bonds, each
convertible into 40 shares of $10 par value common stock. The bonds
are converted on December 31, 2017, when the unamortized discount
is $30,000 and the market price of the stock is $21 per
share.
Record the conversion using the book value approach.
(Credit account titles are automatically indented when
amount is entered. Do not indent manually. If no entry is required,
select "No Entry" for the account titles and enter 0...
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