3. Western World Inc. issues $50,000,000 of convertible bonds with each $1,000 bond convertible into 15 shares of the company's $1 par common stock. The bonds are issued at 104 on January 1, 2020 and pay interest in Jan and July and mature on January 1, 2025. On July 1, 2024, 30% of the bonds are converted when the stock price is $80 per share and 90% of the bond premium has been amortized. Record the following transactions: a. Bond as issuance. b. Conversion of $50,000,000 in bonds to common stock.

3. Western World Inc. issues $50,000,000 of convertible bonds with each $1,000 bond convertible into 15 shares of the company's $1 par common stock. The bonds are issued at 104 on January 1, 2020 and pay interest in Jan and July and mature on January 1, 2025. On July 1, 2024, 30% of the bonds are converted when the stock price is $80 per share and 90% of the bond premium has been amortized. Record the following transactions: a. Bond as issuance. b. Conversion of $50,000,000 in bonds to common stock.

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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