Bridgewater Corp. offered holders of its 1,000 convertiblebonds a premium of $160 per bond to induce conversioninto shares of its common stock. Upon conversionof all the bonds, Bridgewater Corp. recorded the$160,000 premium as a reduction of paid-in capital.Comment on Bridgewater’s treatment of the $160,000“sweetener.”

Bridgewater Corp. offered holders of its 1,000 convertiblebonds a premium of $160 per bond to induce conversioninto shares of its common stock. Upon conversionof all the bonds, Bridgewater Corp. recorded the$160,000 premium as a reduction of paid-in capital.Comment on Bridgewater’s treatment of the $160,000“sweetener.”

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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