Garr Co. issued $4,194,000 of 12%, 5-year convertible bonds on December 1, 2017 for $4,211,720 plus...
Garr Co. issued $4,194,000 of 12%, 5-year convertible bonds on
December 1, 2017 for $4,211,720 plus accrued interest. The bonds
were dated April 1, 2017 with interest payable April 1 and October
1. Bond premium is amortized each interest period on a
straight-line basis. Garr Co. has a fiscal year end of September
30.
On October 1, 2018, $2,097,000 of these bonds were converted into
28,000 shares of $15 par common stock. Accrued interest was paid in
cash at the time of conversion.
A) Prepare the entry to record the interest expense at April 1,
2018. Assume that interest payable was credited when the bonds were
issued. (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 for the amounts. Round answers to 0 decimal places, e.g.
5,725.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
b) Prepare the entry to record the conversion on October 1,
2018. Assume that the entry to record amortization of the bond
premium and interest payment has been made. (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 for the amounts. Round answers
to 0 decimal places, e.g. 5,275.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
Homework Answers
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Garr Co. issued $4,194,000 of 12%, 5-year convertible bonds on
December 1, 2017 for $4,211,720 plus...
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discount is amortized semiannually on a straight-line basis.
On April 1, 2021, $1,440,000 of these bonds were converted into
24,000 shares of $21 par value common stock. Accrued interest was
paid in cash at the time of conversion.
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Prepare the entry to record
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