he following transactions are related to Gold Corp equity in 2020: Jan 5 Sold for cash 1,000 convertible bonds, 3 years, par $1,000 per share at $ 1,000,000. Present value bonds (without conversion rights) $947,605. 1 bond can be converted into 80 ordinary shares ( par @ $10). Mar 3 Purchased 20,000 treasury shares at $20 per share May 10 Sold for cash 1,000 bonds, 4 years, par $1,000 per share with share warrants for $ 1,050,000. Present value bonds without share warrants $990,000. Share warrant to buy 25,000 ordinary shares par $10 at $15 per share. Jun 9 Sold 12,000 treasury shares for a total price of $ 300,000 Jul 28 Announced $15,000 liquidating dividend 7 Aug 15,000 warrants used. The current market price for ordinary shares is $ 30 per share 28 Oct Paid liquidating dividend announced 28 Jul 31 Dec The remaining unused warrants have expired on 31 December 2019 Required: (MANDATORY present the calculation) a. Prepare journal entries to record the above transactions. b. If at maturity, bonds payable are converted into shares, make the necessary journal entries!
he following transactions are related to Gold Corp equity in 2020:
Jan 5 Sold for cash 1,000 convertible bonds, 3 years, par $1,000 per share at $ 1,000,000. Present
Mar 3 Purchased 20,000 treasury shares at $20 per share
May 10 Sold for cash 1,000 bonds, 4 years, par $1,000 per share with share warrants for $ 1,050,000. Present value bonds without share warrants $990,000. Share warrant to buy 25,000 ordinary shares par $10 at $15 per share.
Jun 9 Sold 12,000 treasury shares for a total price of $ 300,000
Jul 28 Announced $15,000 liquidating dividend
7 Aug 15,000 warrants used. The current market price for ordinary shares is $ 30 per share
28 Oct Paid liquidating dividend announced 28 Jul
31 Dec The remaining unused warrants have expired on 31 December 2019
Required: (MANDATORY present the calculation)
a. Prepare
b. If at maturity, bonds payable are converted into shares, make the necessary journal entries!
Step by step
Solved in 4 steps with 9 images
