19. Beach Company bad P600,000 convertible 8% bonds payable outstanding or June 30, 2011. Each P1,000 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

19. Beach Company bad P600,000 convertible 8% bonds payable outstanding or June 30, 2011. Each P1,000 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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Aloe Corp has outstanding 7%, 10-year, $2,000,000 face value bond. The bond was originally sold to yield at 6% annual interest. On June 30, 2010, the carrying amount ofthe outstanding bond was $2,100,000. What amount of unamortized premium on bond should Aloe report in its June 2011 statement of financial position? a.$86,000 b.$114,000 c.$126,000 d.$140,000
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 issued 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…
N7. Account
5. On January 1, 20x1, Kindness Co. issued 3-year, 10%, P2,000,000 convertible bonds for P2,200,000. Principal is due at maturity but interest is payable every year-end. The bonds are convertible into 6,000 ordinary shares with par value per share of P200. On issuance date, the prevailing market rate of interest for similar debt without a conversion feature was 12%. On December 31, 20x2, Kindness Co. retired all the bonds for P2,000,000. On retirement date, the current rate for similar debt instrument without a conversion feature was 11%. Requirement: Provide all the entries in 20x1 and 20x2.
3
On January 1, 2016, Saul Company issued convertible bonds with a face amount of P 5,000,000 for P 6,000,000. The bonds are convertible into 50,000 shares with P 100 par value. The bond have a 5-year life with 10% stated interest rate payable annually every December 31. The fair value of the convertible bonds without conversion option is computed at P 5,399,300 on January 1, 2016. On Dec. 31, 2018, the convertible bonds were not converted but fully paid for P5,550,000. On such date, the fair value of the bonds without conversion privilege is P 5,400,000 and the carrying amount is P 5,178,300. What is the premium on bonds payable on January 1, 2016?|
3. What is the equity component arising from the issuance of bonds payable? A. 450,000 B. 500,000 C. 620,000 D. 0 E. None of the above
3. On April 30, one year before maturity, Romo Company retired $300,000 of its 8% bonds payable at the current market price of 102 (102% of the bond face amount, or $300,000 x 1.02 = $306,000). The bond book value on April 30 is $296,100, reflecting an unamortized discount of $3,900. Bondinterest is currently fully paid and recorded up to the date of retirement.What is the gain or loss on retirement of these bonds?a. $6,000 gainb. $9,900 lossc. $3,900 lossd. $3,900 gain 4. Which of the following liability-related accounts is not a balance sheet account?a. Gain on Bond Retirementb. Discount on Bonds Payablec. Mortgage Notes Payabled. Bonds Payable 6. Bushman, Inc., issues $400,000 of 8% bonds that pay interest semiannually and mature in 8 years.Compute the bond issue price assuming that the prevailing market rate of interest is 10% per yearcompounded semiannually.a. $356,648b. $400,000c. $381,293d. $436,172 7. Bushman, Inc., issues $400,000 of zero coupon bonds that mature in 8 years.…
20. On December 31, 2011, Cey Company had outstanding 10%,P1,000,000 face amount convertible bonds payable maturing on December 31, 2014. Interest is payable on June 30 and December 31. Each P1,000 bond is convertible into 50 shares of P10 par value. On December 31, 2011, the unamortized premium on bonds payable was P60,00O. On December 31, 2011, 400 bonds were converted when Cey's share had a market price of P24. Cey incurred P4,000 in connection with the conversion. No-equity component was recognized when the bonds were originally issued. What is the share premium from the issuance of shares as a result of the bond conversion on December 31, 2011? a. 176,000 b. 220,000 c. 276,000 d. 280,000
On January 1, 2016, Saul Company issued convertible bonds with a face amount of P 5,000,000 for P 6,000,000. The bonds are convertible into 50,000 shares with P 100 par value. The bond have a 5-year life with 10% stated interest rate payable annually every December 31. The fair value of the convertible bonds without conversion option is computed at P 5,399,300 on January 1, 2016. Rectangular Snip On Dec. 31, 2018, the convertible bonds were not converted but fully paid for P5,550,000. On such date, the fair value of the bonds without conversion privilege is P 5,400,000 and the carrying amount is P 5,178,300. What is the carrying amount of the bonds payable on January 1, 2016?
Dividends on Preferred and Common Stock Pecan Theatre Inc. owns and operates movie theaters throughout Florida and Georgia. Pecan Theatre has declared the following annual dividends over a six-year period: Year 1, $40,000; Year 2, $120,000; Year 3, $180,000; Year 4, $230,000; Year 5, $290,000; and Year 6, $360,000. During the entire period ending December 31 of each year, the outstanding stock of the company was composed of 25,000 shares of cumulative, 4% preferred stock, $100 par, and 100,000 shares of common stock, $20 par. Required: 1. Determine the total dividends and the per-share dividends declared on each class of stock for each of the six years. There were no dividends in arrears at the beginning of Year 1. Summarize the data in tabular form. If required, round your answers to two decimal places. If the amount is zero, please enter "0". Preferred Dividends Common Dividends Year TotalDividends Total Per Share Total Per Share Year 1 $ 40,000 $ $…