XYZ Inc issued 445 convertible bonds - each at a price of 101.95% of the $1,000 face value. At issuance, similar bonds without the conversion option had a price of 96.01% of the $1,000 face value. The convertible bonds have just been converted. The carrying value of the bonds on the conversion date is $435,300, and the company has paid $12,460 to the bondholders to induce early conversion. Using the book value method and IFRS, how much will the company's common share balance increase with conversion?
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- Stinson Corporation issued $600,000 of 7%, 10-year bonds payable on March 31, 2022. The market interest rate at the date of issuance was 9%, and the bonds pay interest semiannualy. St Corporation's year-end is March 31. Read the requirements. 1. Using the PV function in Excel, The issue price of the bonds is Requirements 1. Using the PV function in Excel, calculate the issue price of the bonds 2. Prepare an effective-interest amortization table for the bonds through the first three interest payments. Round amounts to the nearest dollar 3. Record Stinson Corporation's issuance of the bonds on March 31, 2022, and payment of the first semiannual interest amount and amortization of the bond discount on September 30, 2022 Explanations are not required Print Done X Clear all Check answerOn 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.Barbie originally issued 5,000,000 face value bonds at 105 or a premium of 250,000. Subsequently, the entity reacquired 1, 000,000 face value bonds to be placed in the treasury at 103. At the time of the reacquisition, the unamortized premium balance is 200,000, and accrued interest on the treasury bonds is 30,000 which is paid in cash. How much should be the book value of the bonds after the reacquisition of the bonds as treasury?
- On December 1, Y4, Boston Corp. issued $4,600,000 (par value), 12%, 5-year convertible bonds for $4,950,000. Interest is payable December 1 and June 1. If the bonds had not been convertible, they would have sold for $4,890,000. Bond premium/discount is amortized each interest period on a straight-line basis. Boston reports under IFRS. Boston’s fiscal year end is September 30. On June 1, Y6, 65% of these bonds were converted into 42,000 no par common shares. At that time shares were trading at $100 per share. Instructions a. Prepare the entry to record the issue of the bonds on December 1, Y4. b. Prepare the entry to record the conversion on June 1, Y6.Florence Inc. issued 8,000, 5-year convertible bonds of $2,000 each for $4,000,000 at the beginning of 2021. The bonds have a stated rate of interest of 9% and interest is payable annually. Each bond can be convertible into 100 shares with a par value of $10. The market rate of similar nonconvertible debt is 10%. Determine the fair value of the equity component using the “with-and-without” method is a. $3,848,288 b. $2,483,600 c. $1,365,688 d. $151,712On January 2, 20x5, a company issues convertible bonds maturing on December 31,20x19. On the maturity date, these bonds are mandatorily convertible into commonshares. The bonds have a face value of $15,000,000 and pay a coupon of 3% on June 30and Dec 31. The bonds were issued to yield 3.8%. The cash proceeds of $14,725,800received on the bond issue were credited to the Convertible Bonds Payable Account andthe cash coupons paid were debited to Interest expense.Required – Prepare the adjusting journal entries required at December 31, 20x5.
- Marinara, Inc. issued a 3-year term 2,000 convertible bonds on January 1, 2021 at 110 with a face value of P1,000 per bond. Interest is payable on annual basis at a stated rate of 6%. The said bonds may be converted anytime into 100 shares with par value of P5. From the time of the issuance of the convertible bonds, the prevailing market rate for similar debt without any conversion feature is 9%. Present value factor of P1 lumpsum using 9% for 3 periods is .77 Present value factor of P1 ordinary annuity using 9% for 3 periods is 2.53 Required: What is the liability component of the issuance of the convertible bonds on January 1, 2021? What is the equity component of the issuance of the convertible bonds on January 1, 2021?At the beginning of current year, Sandy Company issued 5,000 convertible bonds payable. The bonds have a 3 year term and are issued at 110 with a face amount of P1,000 per bond. Interest is payable annually in arrears at a nominal 6% interest rate. Each bond is convertible at anytime up to maturity into 100 ordinary shares with par value of P5. When the bonds are issued, the prevailing market interest rate for similar debt instrument without conversion option is 9%. The present value of 1 at 9% for 3 periods is .77 and the present value of an ordinary annuity of 1 at 9% for 3 periods is 2.53. What amount should be reported as equity component of the original issuance of the convertible bonds payable?Rangel Corporation issued $520,000 of 5%, 15-year bonds payable on March 31, 2022. The market interest rate at the date of issuance was 8%, and the bonds pay interest semiannually. Rangel Corporation's year-end is March 31. Read the requirements. 1. Using the PV function in Excel, calculate the issue price of the bonds. (Round your answer to the nearest whole dollar.) The issue price of the bonds is
- On January 1, 2009, Beta Company issued 5,000 of its 12%, P1,000 face value bonds for P5,600,000, including accrued interest. The bonds are dated October 1, 2008, mature on October 1, 2018, and pay interest annually on October 1. The bonds were issued through an underwriter to whom Beta paid bond issue cost of P150,000. On January 1, 2009, what should Beta report as bonds payable?On May 1, 2011, Stone Corporation issued $4 million of 10-year, 6% convertible bonds at 101. The similar bonds without the conversion rights were sold at 97. Interest is to be paid semi-annually on April 30 and October 31. Stone Corporate uses the straight-line method to amortize bond discount. On July 1, 2017, $1 million of bonds were converted into common shares. Stone Corporation uses the residual method in accounting for the issuance of convertible bonds. December 31 is the end of accounting year (reporting date). Required: Prepare journal entries needed at May 1, 2011; December 31, 2012; April 30, 2014; July 1, 2017;AI Tool and Dye issued 8% bonds with a face amount of $160 million on January 1, 2018. The bonds sold for$150 million. For bonds of similar risk and maturity the market yield was 9%. Upon issuance, AI elected theoption to report these bonds at their fair value. On June 30, 2018, the fair value of the bonds was $145 millionas determined by their market value on the NASDAQ. Will AI report a gain or will it report a loss when adjusting the bonds to fair value? If the change in fair value is attributable to a change in the interest rate, did the rateincrease or decrease? Will the gain or loss be reported in net income or as OCI?