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3170
1000 bonds
at
102
each was issued with
1 detachable stock warrant.
After issuance the bonds were selling at
98 but fair vaule of the warrants cannot be determ
a)
Prepare the entry to record the issance of the bonds and the warrants
Cash
Discount on Bonds Payable
Bonds Payable
Paid-in Capital-Stock Warrant
b)
$3,233,400
$63,400
$3,170,000
$126,800
1
$3,170,000
$70,993
3106600
69740
3176340
3162407
3233400
$3,233,400
$7,593
3106600
3176340
70993
3233400
3233400
Issued
2940000 Convertible
10 year Bonds
Bond Provided for
14% Interest Payable
The discount in Connection with the issue was
The Bonds are Convertible after
for each
1 year into
1200 of bonds
8/1/2015
294000 of bonds were turned in for converstion into
At the time of conversion, the accrued interest on bonds being converted is paid in CASH
Prepare the Journal enteries to record the conversion, amortization, and interest in connection with the
a)
b)
c)
a)
a)
Bonds Payable
Discount on Bonds Payable
Common Stock
Paid-in Capital in Excess- Co. Stk.
294000
Interest Payable
Cash
b)
Interest Expense
Interest Payable
Schedule 1
full amount to be Amortized
Monthly amount
months used
Balance on day before
Debenture converted
Balance on Day of
Remaining Monthly
Month in A/8
3430
297
30870
13.20
13
10%
Schedule 2
Amortization of bond discount charged to bond interest in year:
First part of year
7
330
8 end of year
5
297
Total
Interest on Bonds:
Beg
Monthly
Denbenture percent
Denbenture monthly
b)
Interest would be
240100
154350
394450
Interest Expense
Discount on Bonds Payable
Interest Expense
Interest Payable
c)
Income Summary
Interest Expense
Total Interest
3795
394450
398245
297
30870
398245
on
7/1/2014
Semiannually on
1-Jan and
39600 Amortized monthly with Straight-line
8 share of
tion into
d in CASH
1-Jul
-year)
3531
196000
94469
3430
3531
196000
94469
3430
39600
330
4290
35310
(3531)
31779
297
ear:
2310
1485
3795
411600
34300
370440
30870
297
30870
398245
Authorized to Issue
As of
12/31/2014
2)
The per share market prices of the common stock on selected dates were as follows:
7/1/2014
1/1/2015
4/1/2015
7/1/2015
8/1/2015
11/1/2015
12/31/2015
3)
A total of
7/1/2014
2098800 Par
7228800 shares
10
1807200 shares had been issued and were outstanding
20
21
25
11
10.5
9
10
699600 shares of an authorized
25 Cum. Dividend of
Conversion
1 preferred to
adjusted for splits and dividends
Dividends are quarterly
30-Sep
4)
Subject to a
5)
31-Dec
31-Mar
1-Jan
903600 declared on
12/29/2014
2)
1-Apr
411600 shares of the
new common was issued and old preferred was retired.
3)
4)
1-Aug
5)
1-Nov
30800 shares of common stock were purchased on the open markert
per share
to be treasury stock, still held in treasury as of
6)
7)
a)
Event
Dates (outstanding)
Beg, Balanace (include
5% Stock Dividend)
1-Jan
Conversion of Preferred stock
1-Apr
Stock Split
(2 for 1)
1-Jul
Issued Shares for building
1-Aug
Purchase of Treasury Stock
1-Nov
Total number of Common Shares to Compute Basic
b)
c)
12500000
524700
648000
1172700
11327300
par value
were outstanding
Common Stock
were as follows:
30-Jun
was
12500000
his date.
anding)
4557257
604800
216090
5378147
n issued on
Weighted Shares
$948,780
$1,164,870
$388,290
$1,236,270
$819,047
4557257
Issued
3330000
interest paid
each
10 year
semiannually
8%
30-Jun and
1-Jan-16
333000 of debentures are converted into common stock
Market of the common stock is then
117
Accrued interest at will be paid on the next interest date
127206
5994
333000
8525
6423
237
333000
8288
101765
4795
6660
Convertible at
104
31-Dec
9 shares of
133200
311688
29837
6660
311688
29600
113220
333000
31-Dec-15
are converted on
31-Mar-16