Homework Help is Here – Start Your Trial Now!
Business
Accounting
(ehama) nollsoup Shareholders' equity of Yiruna Toys Inc. (YTI), a public company, at December 31, 2020, was as follows: Common shares, 1,350,000 shares outstanding Contributed surplus, stock option plan Retained earnings 34,600,000 270,000 12,450,000 On January 2, 2021, YTI issued $20,000,000 of 6% convertible bonds. The bonds mature on December 31, 2035 (15 years total), and pay interest on June 30 and December 31 of each year. The total proceeds received on the sale of the bonds were $20,350,000, and the fair value of the bonds at this date was calculated as $19,613,010. Each $1,000 bond is convertible into 20 common shares at any time. YTI's employee stock option plan was initiated on January 1, 2019, and vested on December 31, 2021. The fair value of the options on the initiation date was $450,000. On December 31, 2020, YTI's management estimated that 90% of the options would vest. A total of 92% of the 100,000 options issued actually vested. Also on December 31, 2021, 60% of the vested options were exercised at an exercise price of $12. Required: a) Prepare the journal entry to record the issuance of the convertible bonds. b) Prepare the journal entries for December 31, 2021, relating to the employee stock option plan. >

(ehama) nollsoup Shareholders' equity of Yiruna Toys Inc. (YTI), a public company, at December 31, 2020, was as follows: Common shares, 1,350,000 shares outstanding Contributed surplus, stock option plan Retained earnings 34,600,000 270,000 12,450,000 On January 2, 2021, YTI issued $20,000,000 of 6% convertible bonds. The bonds mature on December 31, 2035 (15 years total), and pay interest on June 30 and December 31 of each year. The total proceeds received on the sale of the bonds were $20,350,000, and the fair value of the bonds at this date was calculated as $19,613,010. Each $1,000 bond is convertible into 20 common shares at any time. YTI's employee stock option plan was initiated on January 1, 2019, and vested on December 31, 2021. The fair value of the options on the initiation date was $450,000. On December 31, 2020, YTI's management estimated that 90% of the options would vest. A total of 92% of the 100,000 options issued actually vested. Also on December 31, 2021, 60% of the vested options were exercised at an exercise price of $12. Required: a) Prepare the journal entry to record the issuance of the convertible bonds. b) Prepare the journal entries for December 31, 2021, relating to the employee stock option plan. >

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

5

(esham 8) & nollsou Shareholders' equity of Yiruna Toys Inc. (YTI), a public company, at December 31, 2020, was as follows: Common shares, 1,350,000 shares outstanding Contributed surplus, stock option plan Retained earnings 34,600,000 270,000 12,450,000 On January 2, 2021, YTI issued $20,000,000 of 6% convertible bonds. The bonds mature on December 31, 2035 (15 years total), and pay interest on June 30 and December 31 of each year. The total proceeds received on the sale of the bonds were $20,350,000, and the fair value of the bonds at this date was calculated as $19,613,010. Each $1,000 bond is convertible into 20 common shares at any time. YTI's employee stock option plan was initiated on January 1, 2019, and vested on December 31, 2021. The fair value of the options on the initiation date was $450,000. On December 31, 2020, YTI's management estimated that 90% of the options would vest. A total of 92% of the 100,000 options issued actually vested. Also on December 31, 2021, 60% of the vested options were exercised at an exercise price of $12. Required: a) Prepare the journal entry to record the issuance of the convertible bonds. b) Prepare the journal entries for December 31, 2021, relating to the employee stock option plan.
Transcribed Image Text:(esham 8) & nollsou Shareholders' equity of Yiruna Toys Inc. (YTI), a public company, at December 31, 2020, was as follows: Common shares, 1,350,000 shares outstanding Contributed surplus, stock option plan Retained earnings 34,600,000 270,000 12,450,000 On January 2, 2021, YTI issued $20,000,000 of 6% convertible bonds. The bonds mature on December 31, 2035 (15 years total), and pay interest on June 30 and December 31 of each year. The total proceeds received on the sale of the bonds were $20,350,000, and the fair value of the bonds at this date was calculated as $19,613,010. Each $1,000 bond is convertible into 20 common shares at any time. YTI's employee stock option plan was initiated on January 1, 2019, and vested on December 31, 2021. The fair value of the options on the initiation date was $450,000. On December 31, 2020, YTI's management estimated that 90% of the options would vest. A total of 92% of the 100,000 options issued actually vested. Also on December 31, 2021, 60% of the vested options were exercised at an exercise price of $12. Required: a) Prepare the journal entry to record the issuance of the convertible bonds. b) Prepare the journal entries for December 31, 2021, relating to the employee stock option plan.
Expert Solution
steps

Step by step

Solved in 2 steps with 2 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Market Efficiency
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
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