4. Prudent Corporation has a balance of $600,000 in the Bonds Payable account. The related unamortized bond discount balance was $ 20,000. Prudent Corporation, in agreement with the bondholders decide to convert $400,000 worth of bonds into common stock of $3 each. The convertible provision stipulates that 50 shares of common stock will be issued for each bond held. Required: Show necessary journal entries to record the above transaction.

4. Prudent Corporation has a balance of $600,000 in the Bonds Payable account. The related unamortized bond discount balance was $ 20,000. Prudent Corporation, in agreement with the bondholders decide to convert $400,000 worth of bonds into common stock of $3 each. The convertible provision stipulates that 50 shares of common stock will be issued for each bond held. Required: Show necessary journal entries to record the above transaction.

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter7: Financial Activities

Section: Chapter Questions

Problem 11QE

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