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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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.
Prepare Natura Co.’s journal entries to record the following transactions involving its short-term investments in held-to-maturity debt securities, all of which occurred during the current year. a. On June 15, paid $1,000 cash to purchase Remed’s 90-day short-term debt securities ($1,000 principal), dated June 15, that pay 10% interest. b. On September 16, received a check from Remed in payment of the principal and 90 days’ interest on the debt securities purchased in part a.
On January 1, 2024, Madison Products issued $45 million of 8%, 10-year convertible bonds at a net price of $45.5 million. ■ Madison recently issued similar, but nonconvertible, bonds at 99 (that is, 99% of face amount). . The bonds pay interest on June 30 and December 31. • Each $1,000 bond is convertible into 30 shares of Madison's no par common stock. • Madison records interest by the straight-line method. ⚫ On June 1, 2026, Madison notified bondholders of its intent to call the bonds at face value plus a 1% call premium on July 1, 2026. ■ By June 30, all bondholders had chosen to convert their bonds into shares as of the interest payment date. ⚫ On June 30, Madison paid the semiannual interest and issued the requisite number of shares for the bonds being converted. Required: Assume that Madison Products prepares its financial statements according to International Financial Reporting Standards using the net method. 1. & 2. Prepare the journal entries for the issuance of the bonds by…
Mead Incorporated began operations in Year 1. Following is a series of transactions and events involving its long-term debt investments in available-for-sale securities. Year 1 January 20 Purchased Johnson & Johnson bonds for $20,500. February 9 Purchased Sony notes for $55,440. June 12 Purchased Mattel bonds for $40,500. December 31 Fair values for debt in the portfolio are Johnson & Johnson, $21,500; Sony, $52,500; and Mattel, $46,350. Year 2 Sold all of the Johnson & Johnson bonds for $23,500. Sold all of the Mattel bonds for $35,850. April 15 July 5 July 22 August 19 Purchased Sara Lee notes for $13,500. Purchased Kodak bonds for $15,300. December 31 Fair values for debt in the portfolio are Kodak, $17,325; Sara Lee, $12,000; and Sony, $60,000. Year 3 February 27 Purchased Microsoft bonds for $160,800. June 21 Sold all of the Sony notes for $57,600. June 30 Purchased Black & Decker bonds for $50,400. August 3 Sold all of the Sara Lee notes for $9,750. November 1 Sold all of the…
Archer Inc. issued $4,000,000 par value, 7% convertible bonds at 99 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.
Blossom Corporation has outstanding 2,000 of $1,000 bonds, each convertible into 70 shares of $10 par value common stock. The bonds are converted on December 31, 2025, when the unamortized discount is $28,000 and the market price of the stock is $21 per share. Record the conversion using the book value approach. (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
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.)
On January 1, 2021, Fowl Products issued $89 million of 6%, 10-year convertible bonds at a net price of $91.5 million. Fowl recently issued similar, but nonconvertible, bonds at 99 (that is, 99% of face amount). The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 30 shares of Fowl's no par common stock. Fowl records interest by the straight-line method. On June 1, 2023, Fowl notified bondholders of its intent to call the bonds at face value plus a 1% call premium on July 1, 2023. By June 30 all bondholders had chosen to convert their bonds into shares as of the interest payment date. On June 30, Fowl paid the semiannual interest and issued the requisite number of shares for the bonds being converted. Required: 1. Prepare the journal entry for the issuance of the bonds by Fowl. 2. Prepare the journal entry for the June 30, 2021, interest payment. 3. Prepare the journal entries for the June 30, 2023, interest payment by Fowl and the conversion of the…
(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…
On May 1, 20X1, Starlight Company purchased $750,000 of Gazing Corp's 12% bonds at 100 plus accrued interest. On December 31, 20X1, Starlight Co. received its annual interest. On March 31, 20X3, Starlight decided to sell half the bonds to Twinkly Inc. at 99 plus accrued interest. Prepare the journal entries for the following transactions: a. The purchase of the bonds b. The receipt of all interest c. The sale of the bonds to Twinkly Inc.
Blend Inc. issued 500, $1,000 bonds at 102. Each bond was issued with two detachable stock warrants. After issuance, the bonds were selling in the market at 97. a. Assume the warrants had a market value of $35 each after issuance. Under the proportional method, the journal entry to record the issuance of the bonds and warrants includes a debit to Discount on Bonds Payable of? b. Assume that after issuance, the market price of the warrants, without the bonds, cannot be determined. Under the incremental method, the journal entry to record the issuance of the bonds and warrants includes a debit to Discount on Bonds Payable of? Please avoid solutions image based thenx

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