For each of the unrelated transactions described below, present the entries required to record each transaction. 1. Blossom Corp. issued $18,900,000 par value 9% convertible bonds at 98. If the bonds had not been convertible, the company's investment banker estimates they would have been sold at 95. 2. Blue Company issued $18,900,000 par value 9% bonds at 97. One detachable stock purchase warrant was issued with each $100 par value bond. At the time of issuance, the warrants were selling for $4. 3. Suppose Sepracor, Inc. called its convertible debt in 2020. Assume the following related to the transaction. The 10%, $10,800,000 par value bonds were converted into 1,080,000 shares of $ 1 par value common stock on July 1, 2020. On July 1, there was $60,000 of unamortized discount applicable to the bonds, and the company paid an additional $69,000 to the bondholders to induce conversion of all the bonds. The company records the conversion using the book value method

For each of the unrelated transactions described below, present the entries required to record each transaction. 1. Blossom Corp. issued $18,900,000 par value 9% convertible bonds at 98. If the bonds had not been convertible, the company's investment banker estimates they would have been sold at 95. 2. Blue Company issued $18,900,000 par value 9% bonds at 97. One detachable stock purchase warrant was issued with each $100 par value bond. At the time of issuance, the warrants were selling for $4. 3. Suppose Sepracor, Inc. called its convertible debt in 2020. Assume the following related to the transaction. The 10%, $10,800,000 par value bonds were converted into 1,080,000 shares of $ 1 par value common stock on July 1, 2020. On July 1, there was $60,000 of unamortized discount applicable to the bonds, and the company paid an additional $69,000 to the bondholders to induce conversion of all the bonds. The company records the conversion using the book value method

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

On June 1, 20x1, ABC Co acquired investment in bonds with detachable warrants for P1,950,000. The bonds have face amount of P2,000,000. Without the detachable warrants, the bonds are selling at P1,800,000. The warrants have fair value of P150,000. ABC Co business model requires debts instruments to be measured at FVOCI and Equity instruments at fair value. Subsequently, warrants were sold for P120,000. Requirement: Prepare Journal Entries on June 1 and selling of warrants.
on 7/2/Y1 Loch Ness, Inc. purchased 50 of the $1,000 face bonds issued by EBerry Corp. Loch Ness paid $1,000 for each bond. The EBerry Corp. bonds were trading at 108 on 12/31/Y1 and at 98 on 12/31/Y2. Loch Ness sold all 50 of the EBerry bonds on 7/1/Y3 for when the market price was 104. They prepare financial statements on December 31st each year. Prepare all the JE needed for Loch Ness's investment in EBerry. Show calculation
2. On January 1, 20X1, Toy inc. Issued $500,000 of convertible bonds. The bonds mature on December 31, 20X5, Interest is payable annually at 6.0% on December 31. The bonds are convertible at the investor's option at the rate of 20 common shares for each $1,000 bond. Similar bonds without the conversion option were selling for $475,000 at time of issuance. Transaction costs of $10,000 were incurred. Required Prepare the journal entry to record the issuance of the bonds.
5. On December 31, 2018, the balance sheet of Alphabet Corporation reported bonds outstanding with a face value of $6,000,000 and a related unamortized premium of $180,000. Interest is payable semiannually on January 1 and July 1. Prepare an entry in journal form without explanation on January 1, 2018, to record the conversion of bonds with a face value of $2,400,000 into common stock. Each $1,000 bond is convertible into 30 shares of $20 par value common stock. (6]
Instructions: Provide the journal entry where bonds were sold at a premium. Candlestick Inc. sold bonds for $105,000 (105% face value) rather than for $90,000.
3
Looking for answer. Please include all calculations for my reference. Thanks!
For each of the unrelated transactions described below, present the entries required to record each transaction. 1. Sage Corp. issued $20,100,000 par value 10% convertible bonds at 98. If the bonds had not been convertible, the company’s investment banker estimates they would have been sold at 95. 2. Pronghorn Company issued $20,100,000 par value 10% bonds at 97. One detachable stock purchase warrant was issued with each $100 par value bond. At the time of issuance, the warrants were selling for $4. 3. Suppose Sepracor, Inc. called its convertible debt in 2020. Assume the following related to the transaction. The 11%, $9,100,000 par value bonds were converted into 910,000 shares of $1 par value common stock on July 1, 2020. On July 1, there was $60,000 of unamortized discount applicable to the bonds, and the company paid an additional $81,000 to the bondholders to induce conversion of all the bonds. The company records the conversion using the book value method.…
At the beginning of the current year, ABC Corporation issued 6,000, 5-year bonds, face value 1,000 each at 105. The bonds has a conversion privilege that provides for an exchange of a 1,000 bond for 20 shares of capital, par 50. Without such conversion privilege, the bonds would only sell at 98. Prepare the entries in connection with the issuance of the bonds and the conversion of the bonds at the end of the current year. U :=
A4
Whispering Company issued $9,000,000 par value 5% bonds at 97. One detachable stock purchase warrant was issued with each $100 par value bond. At the time of issuance, the warrants were selling for $2. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Sunland Corporation issued 1,800 $1,000 bonds at 101. Each bond was issued with one detachable stock warrant. After issuance, the bonds were selling separately at 98. The market price of the warrants without the bonds cannot be determined. Use the incremental method to record the issuance of the bords and warrants. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit