6. Carl's Golf Course Maintenance Inc. had two issues of securities outstanding: common stock and a 6% convertible bond issue in the face amount of $12,000,000. Each $1,000 bond is convertible into forty shares of $20 par value common. On June 30, 2022, the holders of $1,800,000 face value bonds exercised the conversion privilege. The market price of the bonds on that date was $1,100 per bond and the market price of the common stock was $35. The total unamortized bond discount for all $12,000,000 face value of debt at the date of conversion was $750,000. What amount should Morgan credit to the account "APIC - Common Stock," as a result of this conversion?
6. Carl's Golf Course Maintenance Inc. had two issues of securities outstanding: common stock and a 6% convertible bond issue in the face amount of $12,000,000. Each $1,000 bond is convertible into forty shares of $20 par value common. On June 30, 2022, the holders of $1,800,000 face value bonds exercised the conversion privilege. The market price of the bonds on that date was $1,100 per bond and the market price of the common stock was $35. The total unamortized bond discount for all $12,000,000 face value of debt at the date of conversion was $750,000. What amount should Morgan credit to the account "APIC - Common Stock," as a result of this conversion?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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6. Carl's Golf Course Maintenance Inc. had two issues of securities outstanding:
common stock and a 6% convertible bond issue in the face amount of $12,000,000.
Each $1,000 bond is convertible into forty shares of $20 par value common. On June
30, 2022, the holders of $1,800,000 face value bonds exercised the conversion
privilege. The market price of the bonds on that date was $1,100 per bond and the
market price of the common stock was $35. The total unamortized bond discount for
all $12,000,000 face value of debt at the date of conversion was $750,000. What
amount should Morgan credit to the account "APIC - Common Stock," as a result of
this conversion?
None of the other answers
$247.500
$1,687,500
$427,500
$360,000
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