urrent Attempt in ProgressFor each of the unrelated transactions described below, present the entries required to record each transaction.Pharoah Corp. issued $20,100,000 par value 10% convertible bonds at 98. If the bonds had not been convertible, thecompany's investment banker estimates they would have been sold at 95.1.Novak Company issued $20,100,000 par value 10% bonds at 97. One detachable stock purchase warrant was issued witheach $100 par value bond. At the time of issuance, the warrants were selling for $5.2.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 $52,000 of unamortized discount applicable to the bonds, and the company paid an additional $80,000 to thebondholders to induce conversion of all the bonds. The company records the conversion using the book value method.3.Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" forhe account titles and enter 0 for the amounts.)4.78HomePgUpNavtyEnterEndPgDnMv Up

A journal entry is a form of accounting entry that is used to report a business transaction in a…

Answered: For each of the unrelated transactions…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Shurwood Ltd. issued 5,130,000 6%, 10-year, nonconvertible bonds with detachable warrants for $5,250,000. Shortly after issuance, the warrants trade for $309,000 in total, and the bonds were trading at 80, or $5,060,000, ex-warrants (i.e., without warrants attached).Required:1. Provide the journal entry to record the transactions. 2. Provide the journal entry to record the first payment of interest on the convertible bond assuming that the bonds pay interest annually. Effective interest rate is 6.50%
Teal Inc. issued $3,000,000 par value, 7% convertible bonds at 97 for cash. If the bonds had not included the conversion feature, they would have sold for 95 . Prepare the journal entry to record the issuance of the bonds. (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.) Account Titles and Explanation Debit Creditc
Iowa Corporation Issued $4,000,000 par value, 5% convertible bonds, at 101 for cash. If the bonds had not included the conversion feature, they would have sold for 99. Prepare the journal entry to record the issuance of the bonds for Iowa Corporation.
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
Nolan Corporation has outstanding convertible bonds with a face value of $15,000 and a current book value of $17,500. Each $1,000 bond is convertible into 25 shares of common stock (par value $5 per share). All the bonds are converted into common stock on June 1 when the market value of Nolan’s common stock is $50 per share. Required: Using the book value method, prepare the journal entry for Nolan to record the conversion.
James Company had bonds which are convertible into shares of common stock. There were two bonds, both issued at par. One was for $400,000 and was purchased on January 1st with an interest rate of 6%, this bond is convertible into 200,000 shares of common stock. The second bond was for $600,000 and had an interest rate of 8% and was purchased on May 1st, this bond is convertible into 400,000 shares of common stock. Interest on both bonds is paid annually. The overall tax rate for the organization is 20%. Additionally, net income is $800,000, but does not include interest expense or taxes. The organization currently has 460,000 shares of common stock outstanding. A. Calculate Earnings Per Share B. Calculate Dilutive Earnings Per Share using the if converted method. C. Is the organization anti-dilutive? Explain your answer.
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.
25) Harrell's Barrels issued $100 million of 6% convertible bonds at 101. Each $1,000 bond is convertible into 45 shares of Harrell's no par common stock. Bonds that are similar in all respects, except that they are nonconvertible, currently are selling at 98. Harrell applies International Financial Reporting Standards. Recording the issuance of the bonds would cause an increase in Harrell's: A) shareholders' equity of $1,000,000. B) shareholders' equity of $3,000,000. C) assets of $98,000,000. D) liabilities of $101,000,000.
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.…
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.)
(Issuance and Conversion of Bonds) For each of the unrelated transactions described below,present the entry(ies) required to record each transaction.1. Ehrlich Corp. issued $50,000,000 par value 8% convertible bonds at 102. If the bonds had not been convertible, thecompany’s investment banker estimates they would have been sold at par.2. On October 31, 2021, Ehrlich Corp. called its 10% convertible debenture bonds for conversion. The $60,000,000 parvalue bonds were converted into 600,000 shares of $1 par value common stock. On October 31, there was $155,000of unamortized premium applicable to the bonds, and the company paid an additional $355,000 to the bondholders toinduce conversion of all the bonds. The company records the conversion using the book value method. 3. Ehrlich Corporation issued 2,000 shares of $10 par value common stock upon conversion of 1,000 shares of $50 par value preferred stock. The preferred stock was originally issued at $60 per share. The common stock is…

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