1. 2. 3. 1. 2. On August 1, 2025, Lane Corporation called its 10% convertible bonds for conversion. The $8,000,000 par bonds were converted into 320,000 shares of $20 par common stock. On August 1, there was $800,000 of the unamortized premium applicable to the bonds. The fair value of the common stock was $20 per share. Ignore all interest payments. No. Account Titles and Explanation 3. Packard, Inc. decides to issue convertible bonds instead of common stock. The company issues 10% convertible bonds, par $4,000,000, at 97. The investment banker indicates that if the bonds had not been convertible, they would have sold at 94. Gomez Company issues $9,000,000 of bonds with a coupon rate of 8%. To help the sale, detachable stock warrants are issue at the rate of ten warrants for each $1,000 bond sold. It is estimated that the value of the bonds without the warrants is $8,883,000 and the value of the warrants is $567,000. The bonds with the warrants sold at 101. Bonds Payable Premium on Bonds Payable Common Stock Paid-in Capital in Excess of Par - Common Stock Cash Discount on Bonds Payable Bonds Payable Cash Discount on Bonds Payable Bonds Payable Paid-in Capital-Stock Warrants Debit 8000000 800000 Credit 6400000 2400000

1. 2. 3. 1. 2. On August 1, 2025, Lane Corporation called its 10% convertible bonds for conversion. The $8,000,000 par bonds were converted into 320,000 shares of $20 par common stock. On August 1, there was $800,000 of the unamortized premium applicable to the bonds. The fair value of the common stock was $20 per share. Ignore all interest payments. No. Account Titles and Explanation 3. Packard, Inc. decides to issue convertible bonds instead of common stock. The company issues 10% convertible bonds, par $4,000,000, at 97. The investment banker indicates that if the bonds had not been convertible, they would have sold at 94. Gomez Company issues $9,000,000 of bonds with a coupon rate of 8%. To help the sale, detachable stock warrants are issue at the rate of ten warrants for each $1,000 bond sold. It is estimated that the value of the bonds without the warrants is $8,883,000 and the value of the warrants is $567,000. The bonds with the warrants sold at 101. Bonds Payable Premium on Bonds Payable Common Stock Paid-in Capital in Excess of Par - Common Stock Cash Discount on Bonds Payable Bonds Payable Cash Discount on Bonds Payable Bonds Payable Paid-in Capital-Stock Warrants Debit 8000000 800000 Credit 6400000 2400000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Please do not give solution in image format ?
4. What is the equity equity component arising from the insurrance bonds payable on January 1, 2016? 5. What is the loss on the extingushed of the convertible bonds payable on December 31.2018
Bond ConversionE11B. Mendoza Corporation has $400,000 of 6 percent bonds outstanding. There is$20,000 of unamortized discount remaining on these bonds after the July 1, 2014,semiannual interest payment. The bonds are convertible at the rate of 20 shares of $5par value common stock for each $1,000 bond. On July 1, 2014, bondholders presented $300,000 of the bonds for conversion.1. Is there a gain or loss on conversion, and if so, how much is it?2. How many shares of common stock are issued in exchange for the bonds?3. In dollar amounts, how does this transaction affect the total liabilities and the totalstockholders’ equity of the company? In your answer, show the effects on fouraccounts.
24.1 On July 1, 2022, NC called for redemption of all of its P2,000,000 faces amounts bonds payable outstanding at the call price of 102. As of June 30, 2022, the unamortized discount was P90,000, and the unamortized bond issue costs were P45,800. The market value of the bonds was P2,020,300 on July 1, 2022. NC’s effective income tax rate was 30% for 2022. In its income statement for the year ended December 31, 2022, what amount should NC report as loss from bond redemption?
ss.2
Subject:
Do not give image format
1, 202 Remy Corporation issued $1,000,000 of 8% nonconvertible bonds at 104, which are due on February 28, 2041. In addition, each $1,000 bond was issued with 25 detachable stock warrants, each of which entitled the bondholder to purchase for $50 one share of Remy common stock, par value $25. The bonds without the warrants would normally sell at 95. On March 1, 2021, the fair value of Remy's common stock was $40 per share and the fair value of the warrants was $2.00. What amount should Remy record on March 1, 2021 as paid-in capital from stock warrants? $73,600 $85,200 $52,000 O $104,000 ASA
45
19. Beach Company bad P600,000 convertible 8% bonds payable outstanding on June 30, 2011. Each P1,00O bond was convertible into 10 ordinary shares of P50 par value. On July 1, 2011, the interest was paid to bondholders, and the bonds were converted into ordinary shares, which had a fair value of P75 per share. The unamortized premium on these bonds was P12,000 at the date of conversion. No equity component was recognized when the bonds were originally issued. What is the increase in the share capital as a result of the bond conversion? * a. 300,000 b. 306,000 c. 450,000 d. 600,000
please help me experts
3