For each of the unrelated situations described below, prepare the entries required to record the transactions. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) O 1. On August 1, 2023, Sheffield Corporation called its 10% convertible bonds for conversion. The $4,000,000 par value bonds were converted into 160,000 no par common shares. On August 1, there was $349,000 of unamortized premium applicable to the bonds. At the time of issuance, Contributed Surplus-Conversion Rights was credited for $151,000, which represented the equity portion of the convertible bonds, and the market value of the common shares was $20 per share. The company records the conversion using the book value method. Ignore all interest payments. 2. Grouper Inc. issues 10% convertible bonds, par $1,000,000, at 97. The investment banker indicates that if the bonds had not been convertible they would have sold at 94. Use the residual method. 3. Oriole Ltd. issues $2,000,000 par value, 8% bonds. To help the sale, detachable stock warrants are issued at the rate of ten warrants for each $1,100 bond sold. It is estimated that the value of the bonds without the warrants is $1,984,000 and the value of the warrants is $116,000. The bonds with the warrants sold at 103. Use the residual method. No. Account Titles and Explanation Debit Credit
For each of the unrelated situations described below, prepare the entries required to record the transactions. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) O 1. On August 1, 2023, Sheffield Corporation called its 10% convertible bonds for conversion. The $4,000,000 par value bonds were converted into 160,000 no par common shares. On August 1, there was $349,000 of unamortized premium applicable to the bonds. At the time of issuance, Contributed Surplus-Conversion Rights was credited for $151,000, which represented the equity portion of the convertible bonds, and the market value of the common shares was $20 per share. The company records the conversion using the book value method. Ignore all interest payments. 2. Grouper Inc. issues 10% convertible bonds, par $1,000,000, at 97. The investment banker indicates that if the bonds had not been convertible they would have sold at 94. Use the residual method. 3. Oriole Ltd. issues $2,000,000 par value, 8% bonds. To help the sale, detachable stock warrants are issued at the rate of ten warrants for each $1,100 bond sold. It is estimated that the value of the bonds without the warrants is $1,984,000 and the value of the warrants is $116,000. The bonds with the warrants sold at 103. Use the residual method. No. Account Titles and Explanation Debit Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Ee 206.
Transcribed Image Text:For each of the unrelated situations described below, prepare the entries required to record the transactions. (Credit account titles are
automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries. If no entry is required,
select "No Entry" for the account titles and enter O for the amounts.)
1. On August 1, 2023, Sheffield Corporation called its 10% convertible bonds for conversion. The $4,000,000 par value bonds
were converted into 160,000 no par common shares. On August 1, there was $349,000 of unamortized premium applicable to
the bonds. At the time of issuance, Contributed Surplus-Conversion Rights was credited for $151,000, which represented the
equity portion of the convertible bonds, and the market value of the common shares was $20 per share. The company records
the conversion using the book value method. Ignore all interest payments.
2. Grouper Inc. issues 10% convertible bonds, par $1,000,000, at 97. The investment banker indicates that if the bonds had not
been convertible they would have sold at 94. Use the residual method.
3. Oriole Ltd. issues $2,000,000 par value, 8% bonds. To help the sale, detachable stock warrants are issued at the rate of ten
warrants for each $1,100 bond sold. It is estimated that the value of the bonds without the warrants is $1,984,000 and the value
of the warrants is $116,000. The bonds with the warrants sold at 103. Use the residual method.
No.
Account Titles and Explanation
Debit
Credit
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