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For each of the unrelated transactions described below, present the entries required to record each transaction. 1. Whispering Corp. issued $21,000,000 par value 9% convertible bonds at 99. If the bonds had not been convertible, the company's investment banker estimates they would have been sold at 95. 2. 3. Metlock Company issued $21,000,000 par value 9% bonds at 98. One detachable stock purchase warrant was issued with each $100 par value bond. At the time of issuance, the warrants were selling for $4. Suppose Sepracor, Inc. called its convertible debt in 2025. Assume the following related to the transaction. The 10%, $10,400,000 par value bonds were converted into 1,040,000 shares of $1 par value common stock on July 1, 2025. On July 1, there was $60,000 of unamortized discount applicable to the bonds, and the company paid an additional $71,000 to the bondholders to induce conversion of all the bonds. The company records the conversion using the book value method. (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.) 1. Cash Discount on Bonds Payable Bonds Payable 2. Cash 20790000 210000 20580000 Discount on Bonds Payable 1260000 Bonds Payable Paid-in Capital-Stock Warrants 3. Bonds Payable Discount on Bonds Payable Common Stock Paid-in Capital in Excess of Par - Common Stock Cash 10400000 60000 71000 71000 21000000 21000000 840000 1040000 9491000

For each of the unrelated transactions described below, present the entries required to record each transaction. 1. Whispering Corp. issued $21,000,000 par value 9% convertible bonds at 99. If the bonds had not been convertible, the company's investment banker estimates they would have been sold at 95. 2. 3. Metlock Company issued $21,000,000 par value 9% bonds at 98. One detachable stock purchase warrant was issued with each $100 par value bond. At the time of issuance, the warrants were selling for $4. Suppose Sepracor, Inc. called its convertible debt in 2025. Assume the following related to the transaction. The 10%, $10,400,000 par value bonds were converted into 1,040,000 shares of $1 par value common stock on July 1, 2025. On July 1, there was $60,000 of unamortized discount applicable to the bonds, and the company paid an additional $71,000 to the bondholders to induce conversion of all the bonds. The company records the conversion using the book value method. (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.) 1. Cash Discount on Bonds Payable Bonds Payable 2. Cash 20790000 210000 20580000 Discount on Bonds Payable 1260000 Bonds Payable Paid-in Capital-Stock Warrants 3. Bonds Payable Discount on Bonds Payable Common Stock Paid-in Capital in Excess of Par - Common Stock Cash 10400000 60000 71000 71000 21000000 21000000 840000 1040000 9491000

Financial Reporting, Financial Statement Analysis and Valuation
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter7: Financial Activities
Section: Chapter Questions
Problem 11QE
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For each of the unrelated transactions described below, present the entries required to record each transaction. 1. Whispering Corp. issued $21,000,000 par value 9% convertible bonds at 99. If the bonds had not been convertible, the company's investment banker estimates they would have been sold at 95. 2. 3. Metlock Company issued $21,000,000 par value 9% bonds at 98. One detachable stock purchase warrant was issued with each $100 par value bond. At the time of issuance, the warrants were selling for $4. Suppose Sepracor, Inc. called its convertible debt in 2025. Assume the following related to the transaction. The 10%, $10,400,000 par value bonds were converted into 1,040,000 shares of $1 par value common stock on July 1, 2025. On July 1, there was $60,000 of unamortized discount applicable to the bonds, and the company paid an additional $71,000 to the bondholders to induce conversion of all the bonds. The company records the conversion using the book value method. (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.)
Transcribed Image Text:For each of the unrelated transactions described below, present the entries required to record each transaction. 1. Whispering Corp. issued $21,000,000 par value 9% convertible bonds at 99. If the bonds had not been convertible, the company's investment banker estimates they would have been sold at 95. 2. 3. Metlock Company issued $21,000,000 par value 9% bonds at 98. One detachable stock purchase warrant was issued with each $100 par value bond. At the time of issuance, the warrants were selling for $4. Suppose Sepracor, Inc. called its convertible debt in 2025. Assume the following related to the transaction. The 10%, $10,400,000 par value bonds were converted into 1,040,000 shares of $1 par value common stock on July 1, 2025. On July 1, there was $60,000 of unamortized discount applicable to the bonds, and the company paid an additional $71,000 to the bondholders to induce conversion of all the bonds. The company records the conversion using the book value method. (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.)
1. Cash Discount on Bonds Payable Bonds Payable 2. Cash 20790000 210000 20580000 Discount on Bonds Payable 1260000 Bonds Payable Paid-in Capital-Stock Warrants 3. Bonds Payable Discount on Bonds Payable Common Stock Paid-in Capital in Excess of Par - Common Stock Cash 10400000 60000 71000 71000 21000000 21000000 840000 1040000 9491000
Transcribed Image Text:1. Cash Discount on Bonds Payable Bonds Payable 2. Cash 20790000 210000 20580000 Discount on Bonds Payable 1260000 Bonds Payable Paid-in Capital-Stock Warrants 3. Bonds Payable Discount on Bonds Payable Common Stock Paid-in Capital in Excess of Par - Common Stock Cash 10400000 60000 71000 71000 21000000 21000000 840000 1040000 9491000
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