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.
a. Bonds having a face value of $100,000 exercised their conversion privilege on January 1, 20x4. Assume interest has already been paid.
b. Assume that on January 1, 20x4, to induce conversion, Anadarko offered 25 common shares per bond if bondholders elected to convert between January 1,20x4 and July 1, 20x4. One-fourth of the bondholders elected to convert under these terms on July 1, 20x4, when the market price of the stock was $42.
c. Contrary to the facts above, assume that these bonds had been issued with non-detachable stock purchase warrants entitling the holder to receive 20 shares of common stock. One-half of the bondholders exercised their warrants on July 1, 20x3.
Homework Answers
Add Answer to:
On July 1, 20x3, Anadarko Co. had
twenty-year bonds payable outstanding with a face value of...
On July 1, 2017, Tuttle Company had bonds payable outstanding with a face value of $250,000...
On July 1, 2017, Tuttle Company had bonds payable outstanding with a face value of $250,000 and a book value of $244,000. The interest on these bonds was paid on June 30. When these bonds were issued, each $1,000 bond was convertible into 24 shares of $10 par common stock. To induce conversion, on June 15, 2017, the terms were changed so that each bond was convertible into 26 shares of common stock if the conversion was made within 30...
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, 2018, Carlo Ltd., which follows ASPE, issued a series of $4,200,000 face-value convertible...
On July 1, 2018, Carlo Ltd., which follows ASPE, issued a series of $4,200,000 face-value convertible bonds due in five years. Each $1,000 bond allowed the holder to convert the bond to 100 common shares. On the day the bonds were issued, Carlo calculated that the conversion rights were valued at $203,844. On July 1, 2021, the bonds had a carrying value on Carlo’s books of $4,123,076, and the fair market value of the bonds without the convertible option was...
On July 1, 2018, Nash Ltd., which follows ASPE, issued a series of $3,100,000 face-value convertible...
On July 1, 2018, Nash Ltd., which follows ASPE, issued a series of $3,100,000 face-value convertible bonds due in five years. Each $1,000 bond allowed the holder to convert the bond to 100 common shares. On the day the bonds were issued, Nash calculated that the conversion rights were valued at $156,290. On July 1, 2021, the bonds had a carrying value on Nash's books of $3,042,345, and the fair market value of the bonds without the convertible option was...
On January 1, 2019, Culver issued 10-year, $300,000 face value, 6% bonds at par. Each $1,000...
On January 1, 2019, Culver issued 10-year, $300,000 face value, 6% bonds at par. Each $1,000 bond is convertible into 30 shares of Culver $2 par value common stock. The company has had 10,000 shares of common stock (and no preferred stock) outstanding throughout its life. None of the bonds have been converted as of the end of 2020. (Ignore all tax effects.) (c) Assume that 75% of the holders of Culver's convertible bonds convert their bonds to stock on...
On January 1, 2016, Sheffield Company issued 10-year, $106,000 face value, 6% bonds at par (interest...
On January 1, 2016, Sheffield Company issued 10-year, $106,000 face value, 6% bonds at par (interest payable annually on January 1). Each $1,000 bond is convertible into 31 shares of Sheffield $2 par value common stock. The company has had 10,000 shares of common stock (and no preferred stock) outstanding throughout its life. None of the bonds have been converted as of the end of 2017. Sheffield also has adopted a stock-option plan that granted options to key executives to...
On January 1, 2019, Concord issued 10-year, $300,000 face value, 6% bonds at par. Each $1,000...
On January 1, 2019, Concord issued 10-year, $300,000 face value,
6% bonds at par. Each $1,000 bond is convertible into 30 shares of
Concord $2 par value common stock. The company has had 10,000
shares of common stock (and no preferred stock) outstanding
throughout its life. None of the bonds have been converted as of
the end of 2020. (Ignore all tax effects.)
a. Prepare the journal entry Concord would have made on January
1, 2019, to record the issuance...
On January 1, 2016, Oriole Company issued 10-year, $96,000 face value, 6% bonds at par (interest...
On January 1, 2016, Oriole Company issued 10-year, $96,000 face value, 6% bonds at par (interest payable annually on January 1). Each $900 bond is convertible into 32 shares of Oriole $2 par value common stock. The company has had 9,000 shares of common stock (and no preferred stock) outstanding throughout its life. None of the bonds have been converted as of the end of 2017. Oriole also has adopted a stock-option plan that granted options to key executives to...
On January 1, 2016, Garner issued 10-year, $200,000 face value, 6% bonds at par. Each $1,000...
On January 1, 2016, Garner issued 10-year, $200,000 face value, 6% bonds at par. Each $1,000 bond is convertible into 30 shares of Garner $2 par value common stock. The company has had 10,000 shares of common stock (and no preferred stock) outstanding throughout its life. None of the bonds have been converted as of the end of 2017. (Ignore all tax effects.) Requirement 1: A.) Accounting Prepare the journal entry Garner would have made on January 1, 2016, to...
On April 1, 2018, Windel Corporation issued bonds with detachable warrants. Information related to these bonds...
On April 1, 2018, Windel Corporation issued bonds with detachable warrants. Information related to these bonds is shown below: Face value of bonds $325,000 Stated rate of interest 8% Bonds issued at 106% Each $1,000 bond was sold with 20 detachable warrants Each warrant allowed the investor to purchase one share of common stock for $16 The par value of the common stock is $4.00 On April 1, 2018 the market values were: Common stock $12 Warrants $7 In February...
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, 2018, Nash Ltd., which follows ASPE, issued a series of $3,100,000 face-value convertible bonds due in five years. Each $1,000 bond allowed the holder to convert the bond to 100 common shares. On the day the bonds were issued, Nash calculated that the conversion rights were valued at $156,290. On July 1, 2021, the bonds had a carrying value on Nash's books of $3,042,345, and the fair market value of the bonds without the convertible option was...
On January 1, 2019, Culver issued 10-year, $300,000 face value, 6% bonds at par. Each $1,000 bond is convertible into 30 shares of Culver $2 par value common stock. The company has had 10,000 shares of common stock (and no preferred stock) outstanding throughout its life. None of the bonds have been converted as of the end of 2020. (Ignore all tax effects.) (c) Assume that 75% of the holders of Culver's convertible bonds convert their bonds to stock on...
On January 1, 2019, Concord issued 10-year, $300,000 face value,
6% bonds at par. Each $1,000 bond is convertible into 30 shares of
Concord $2 par value common stock. The company has had 10,000
shares of common stock (and no preferred stock) outstanding
throughout its life. None of the bonds have been converted as of
the end of 2020. (Ignore all tax effects.)
a. Prepare the journal entry Concord would have made on January
1, 2019, to record the issuance...
Most questions answered within 3 hours.
-
Assume that the readings at freezing on a batch of thermometers
are normally distributed with a...
asked 1 minute ago -
MENSA Int'l just paid a dividend of $1.25. Their growth rate in
dividends is 10% and...
asked 2 seconds from now -
4. The excitation of a 414 V, 3-phase, delta-connected
synchronous motor is such that that the...
asked 16 minutes ago -
3. (20 pts) In the Carnot engine (refer to the figure in
question 2), an ideal...
asked 23 minutes ago -
A contestant is facing 10 closed doors. Behind one of these
doors there is a prize....
asked 25 minutes ago -
Showing appropriate work and equations, what is the yield to
maturity on a share of Six...
asked 40 minutes ago -
what would be the best entry mode in shipping from the U.S to Spain
by boat...
asked 45 minutes ago -
Under certain conditions, the substance ammonium
nitrate can be broken down to form dinitrogen
monoxide and...
asked 46 minutes ago -
1. A boy stands on one end of a boat, and then walks to the
other...
asked 56 minutes ago -
Casey is on trial under criminal allegations that she engaged in
fraudulent behavior at the company...
asked 1 hour ago -
Surplus Styles is a manufacturer of hair care products,
including shampoos, conditioners, and hair gels. The...
asked 59 minutes ago -
Using an income-expenditure diagram, use the infinite line and
double-drop line tools to show the economy...
asked 1 hour ago