AMC Ltd. issued five-year, 5% bonds for their par value of $900,000 on 1 January 20X1 Interest is paid annually. The bonds are convertible to common shares at a rate of 50 common shares for every $1,000 bond. (PV of $1, PVA of $1, and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: d. Assume instead that the bonds were repaid for $940,000 after interest was paid in Year 3. Provide the journal entry for retirement, assuming $68,000 of the payment related to the option and the rest related to the bond. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate and final answers to the nearest whole dollar.) View transaction list Journal entry worksheet 1 Record the entry for repayment of bonds. 2. Assume that the bonds were mandatorily convertible at maturity. a. Calculate the portion of the original proceeds relating to interest and the equity portion. Use a discount rate of 6%. (Round your final answers to the nearest whole dollar. Round time value factor to 5 decimal places.) Assignment Interest portion Equity portion b. Provide the journal entry on issuance. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final answers to the nearest whole dollar. Round time value factor to 5 decimal places.) View transaction list Journal entry worksheet 1 Record the entry for issuance of bonds.
AMC Ltd. issued five-year, 5% bonds for their par value of $900,000 on 1 January 20X1 Interest is paid annually. The bonds are convertible to common shares at a rate of 50 common shares for every $1,000 bond. (PV of $1, PVA of $1, and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: d. Assume instead that the bonds were repaid for $940,000 after interest was paid in Year 3. Provide the journal entry for retirement, assuming $68,000 of the payment related to the option and the rest related to the bond. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate and final answers to the nearest whole dollar.) View transaction list Journal entry worksheet 1 Record the entry for repayment of bonds. 2. Assume that the bonds were mandatorily convertible at maturity. a. Calculate the portion of the original proceeds relating to interest and the equity portion. Use a discount rate of 6%. (Round your final answers to the nearest whole dollar. Round time value factor to 5 decimal places.) Assignment Interest portion Equity portion b. Provide the journal entry on issuance. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final answers to the nearest whole dollar. Round time value factor to 5 decimal places.) View transaction list Journal entry worksheet 1 Record the entry for issuance of bonds.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:AMC Ltd. issued five-year, 5% bonds for their par value of $900,000 on 1 January 20X1. Interest is paid annually. The bonds are
convertible to common shares at a rate of 50 common shares for every $1,000 bond.
(PV of $1, PVA of $1, and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
Required:
d. Assume instead that the bonds were repaid for $940,000 after interest was paid in Year 3. Provide the journal entry for retirement,
assuming $68,000 of the payment related to the option and the rest related to the bond. (If no entry is required for a
transaction/event, select "No journal entry required" in the first account field. Round your intermediate and final answers to the
nearest whole dollar.)
View transaction list
Journal entry worksheet
1
Record the entry for repayment of bonds.
2. Assume that the bonds were mandatorily convertible at maturity.
a. Calculate the portion of the original proceeds relating to interest and the equity portion. Use a discount rate of 6%. (Round your
final answers to the nearest whole dollar. Round time value factor to 5 decimal places.)
Assignment
Interest portion
Equity portion
b. Provide the journal entry on issuance. (If no entry is required for a transaction/event, select "No journal entry required" in the first
account field. Round your final answers to the nearest whole dollar. Round time value factor to 5 decimal places.)
View transaction list
Journal entry worksheet
1
Record the entry for issuance of bonds.
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