Carla Vista Corporation issued convertible bonds at a premium of $9800. The $193000 bond issue was convertible into 3200 sharesof common stock (par value $20). Two years later, all of the bonds were converted to shares of stock. At that time, the unamortizedpremium was $4200, the market value of the bonds was $213000, and the market value of the stock was $60 per share. What amountof paid-in capital in excess of par is recorded on the conversion of the bonds?O $133200O $153200$129000$138800

The book value of bonds is calculated as face value of bonds add unamortized premium. The shares are…

Answered: Carla Vista Corporation issued…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Jones Corp. had 120,000 shares outstanding all of year 8. During year 8, Jones paid dividends of $60,000 on its non-cumulative, convertible preferred stock. The convertible preferred shares may be exchanged for 20,000 of shares of common stock. The $4,000,000 face value, 6% convertible bonds (issued at par) are convertible into 120,000 shares of common stock. Net income for year 8 is $250,000 and the corporate tax rate is 40%. Security Name Convertible Proferred Shares 6% Convertible Bonds Issued at Par Value O $1.29 O $1.39 O $1.58 O $1.60 4 Numerator Denominator If-Converted f-Converted Method Method $60,000 $144,000 What is diluted earnings per share for year 87 20,000 120,000 Per Share Effect $3.00 $1.20
n January 1, 2015, when its $30 par value common stock was selling for $80 per share, a corporation issued $10 million of 14% convertible debentures due in 10 years. The conversion option allowed the holder of each $1,000 bond to convert it into six shares of the corporation’s $30 par value common stock. The debentures were issued for $11 million. At the time of issuance, the present value of the bond payments was $8.50 million, and the corporation believes the difference between the present value and the amount paid is attributable to the conversion feature. On January 1, 2016, the corporation’s $30 par value common stock was split 3 for 1. On January 1, 2017, when the corporation’s $10 par value common stock was selling for $90 per share, holders of 40% of the convertible debentures exercised their conversion options. The corporation uses the straight-line method for amortizing any bond discounts or premiums. Required: 1. Prepare the journal entry to record the original issuance…
The JIRAF Company has 1700 bonds outstanding that have a market price of $1200 each and a face value of $1000. floatation cost is 0.015 the bond pays coupon of 0.055 quarterly for 11 years. The company also has 6,00 shares of preferred stock at a market price of $40 and dividends 1.5 each par value 20 dollars. The common stock is priced at $29 a share it is undervalued by $1.5 and there are 70000 shares outstanding, par value is 5 dollars the stock paid this year $1.1 and will continue to grow at a rate of 0.035 TAXES ARE 0.25 what is the cost of debt after tax? what is the cost of PS what is the cost of common stock? what is the weight of the bond according to book value method what is the weight of the stock according to book value method what is the weight of preferred stock according to book value method what is the weight of preferred stock according to book value method
Nolan Corporation has outstanding convertible bonds with a face value of $15,000 and a current book value of $17,500. Each $1,000 bond is convertible into 25 shares of common stock (par value $5 per share). All the bonds are converted into common stock on June 1 when the market value of Nolan’s common stock is $50 per share. Required: Using the book value method, prepare the journal entry for Nolan to record the conversion.
James Company had bonds which are convertible into shares of common stock. There were two bonds, both issued at par. One was for $400,000 and was purchased on January 1st with an interest rate of 6%, this bond is convertible into 200,000 shares of common stock. The second bond was for $600,000 and had an interest rate of 8% and was purchased on May 1st, this bond is convertible into 400,000 shares of common stock. Interest on both bonds is paid annually. The overall tax rate for the organization is 20%. Additionally, net income is $800,000, but does not include interest expense or taxes. The organization currently has 460,000 shares of common stock outstanding. A. Calculate Earnings Per Share B. Calculate Dilutive Earnings Per Share using the if converted method. C. Is the organization anti-dilutive? Explain your answer.
Sandhill Corporation issued convertible bonds at a premium of $9900. The $208000 bond issue was convertible into 4400 shares of common stock (par value $20). Two years later, all of the bonds were converted to shares of stock. At that time, the unamortized premium was $4200, the market value of the bonds was $228000, and the market value of the stock was $60 per share. What amount of paid-in capital in excess of par is recorded on the conversion of the bonds? $144200 ○ $120000 $124200 O $129900
Kahlua Company had 100,000 shares of common stock outstanding on January 1st. On September 30th, Kahlua sold 48,000 shares of common stock for cash. Kahlua had 10,000 shares of convertible preferred stock outstanding throughout the year. Each preferred stock is $100 par, 6%, and is convertible into 3 shares of common stock. Kahlua also had 500, 8%, convertible bonds outstanding throughout the year. Each $1,000 bond is convertible into 30 shares of common stock. The bonds were issued at par. Net income for the year was $300,000 and the tax rate is 40%. The preferred dividends were paid during the year.Basic earnings per share reported by Kahlua Company for the year is closest to:-$2.14-$2.68-$2.06-$2.36 Diluted earnings per share reported by Kahlua Company for the year is closest to:-$2.14-$2.68-$2.06-$2.36
sarasota corporation has 9% convertible bonds outstanding. it recorded interest expense (net of income taxes) Oven $6,300 on these bonds during the year. The bonds are convertible into 2500 shares of common stock. compute the impact of these convertible bonds on Sarasota diluted earnings per share.
On December 31, Lowland, Inc., converts its 900,000 par value bonds (carrying value also $900,000) into 90,000 shares of $6 par value common stock. Complete the necessary journal entry.
On January 1, 2016, Scutaro Company issued 10-year, $200,000 face value, 6% bonds at par (payable annually on January 1). Each $1,000 bond is convertible into 30 shares of Scutaro $2 par value common stock. The company has had 10,000 shares of common stock (and no preferred stock) outstanding throughout its life. None of the bonds have been converted as of the end of 2017.Scutaro also has adopted a stock-option plan that granted options to key executives to purchase 4,000 shares of the company’s common stock. The options were granted on January 2, 2016, and were exercisable 2 years after the date of grant if the grantee was still an employee of the company (the service period is 2 years). The options expired 6 years from the date of grant. The option price was set at $4, and the fair value option-pricing model determines the total compensation expense to be $18,000. All of the options were exercised during the year 2018: 3,000 on January 3 when the market price was $6, and 1,000 on May…
A corporation began be issuing 1 million share of $1 common stock. The proceeds from this common stock issuance was $10,000,000. The corporation issued a first-mortgage bond for $25,000,000. It was issued at par value, the coupon interest rate is 5% and the life is 10 years. The corporation established a line of credit with a commercial bank and immediately borrowed $2,000,000 from this line of credit. This amount is to be repaid in 6 months. Construct a partial classified balance sheet in good form based on the transactions above.

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS