Crane Company has $3930000 of 7% convertible bonds outstanding. Each $1,000 bond is convertible into 30 shares of $30 par value common stock. The bonds pay interest on January 31 and July 31. On July 31, 2021, the holders of $1230000 bonds exercised the conversion privilege. On that date the market price of the bonds was 106 and the market price of the common stock was $36. The total unamortized bond premium at the date of conversion was $277000. Crane should record, as a result of this conversion, a loss of $12300. credit of $88640 to Premium on Bonds Payable. credit of $183270 to Paid-in Capital in Excess of Par. credit of $208870 to Paid-in Capital in Excess of Par.
Crane Company has $3930000 of 7% convertible bonds outstanding. Each $1,000 bond is convertible into 30 shares of $30 par value common stock. The bonds pay interest on January 31 and July 31. On July 31, 2021, the holders of $1230000 bonds exercised the conversion privilege. On that date the market price of the bonds was 106 and the market price of the common stock was $36. The total unamortized bond premium at the date of conversion was $277000. Crane should record, as a result of this conversion, a loss of $12300. credit of $88640 to Premium on Bonds Payable. credit of $183270 to Paid-in Capital in Excess of Par. credit of $208870 to Paid-in Capital in Excess of Par.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 21E: On July 2, 2018, McGraw Corporation issued 500,000 of convertible bonds. Each 1,000 bond could be...
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Crane Company has $3930000 of 7% convertible bonds outstanding. Each $1,000 bond is convertible into 30 shares of $30 par value common stock. The bonds pay interest on January 31 and July 31. On July 31, 2021, the holders of $1230000 bonds exercised the conversion privilege. On that date the market price of the bonds was 106 and the market price of the common stock was $36. The total unamortized bond premium at the date of conversion was $277000. Crane should record, as a result of this conversion, a
loss of $12300.
credit of $88640 to Premium on Bonds Payable.
credit of $183270 to Paid-in Capital in Excess of Par.
credit of $208870 to Paid-in Capital in Excess of Par.
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