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Janenda Inc. issued $5,000,000 of convertible 5-year bonds on July 1, 2025. The bonds provide for 6% interest payable semiannually on January 1 and July 1. The discount in connection with the issue was $120,000, which is being amortized monthly on a straight-line basis. The bonds are convertible after one year into 15 shares of Janenda Inc.'s $1 par value common stock for each $1,000 of bonds. On October 1, 2026, $600,000 of bonds were turned in for conversion into common stock. Interest has been accrued monthly and paid as due. At the time of conversion, any accrued interest on bonds being converted is paid in cash. Prepare the journal entries to record the conversion, amortization, and interest in connection with the bonds as of the following dates. (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. List all debit entries before credit entries.) (a) October 1, 2026. (Assume the book value method is used.) (b) October 31, 2026. (c) December 31, 2026, including closing entries for end-of-year. 비

Janenda Inc. issued $5,000,000 of convertible 5-year bonds on July 1, 2025. The bonds provide for 6% interest payable semiannually on January 1 and July 1. The discount in connection with the issue was $120,000, which is being amortized monthly on a straight-line basis. The bonds are convertible after one year into 15 shares of Janenda Inc.'s $1 par value common stock for each $1,000 of bonds. On October 1, 2026, $600,000 of bonds were turned in for conversion into common stock. Interest has been accrued monthly and paid as due. At the time of conversion, any accrued interest on bonds being converted is paid in cash. Prepare the journal entries to record the conversion, amortization, and interest in connection with the bonds as of the following dates. (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. List all debit entries before credit entries.) (a) October 1, 2026. (Assume the book value method is used.) (b) October 31, 2026. (c) December 31, 2026, including closing entries for end-of-year. 비

FINANCIAL ACCOUNTING
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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Janenda Inc. issued $5,000,000 of convertible 5-year bonds on July 1, 2025. The bonds provide for 6% interest payable semiannually on January 1 and July 1. The discount in connection with the issue was $120,000, which is being amortized monthly on a straight-line basis. The bonds are convertible after one year into 15 shares of Janenda Inc's $1 par value common stock for each $1,000 of bonds. On October 1, 2026, $600,000 of bonds were turned in for conversion into common stock. Interest has been accrued monthly and paid as due. At the time of conversion, any accrued interest on bonds being converted is paid in cash. Prepare the journal entries to record the conversion, amortization, and interest in connection with the bonds as of the following dates. (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. List all debit entries before credit entries.) (a) (b) (c) No. Date Account Titles and Explanation (a) October 1, 2026. (Assume the book value method is used.) October 31, 2026. December 31, 2026, including closing entries for end-of-year. (c) Oct. 1, 2026 Oct. 1. 2026 Oct. (b) 31, 2026 Oct. 31, 2026 Dec. 31, 2026 Dec. 31, 2026 Dec. 31, 2026 Bonds Payable Discount on Bonds Payable Common Stock Paid-in Capital in Excess of Par - Common Stock (To record conversion of bonds to common stock) Interest Expense Cash (To record payment of interest due on converted bonds) (To record amortization of discount on bonds) (To record accrual of interest payable on bonds) (To record amortization of discount on bonds) (To record accrual of interest payable on bonds) (To close expense account) Debit 600,000 15000 18000 Credit 15000 600000 18000
Transcribed Image Text:Janenda Inc. issued $5,000,000 of convertible 5-year bonds on July 1, 2025. The bonds provide for 6% interest payable semiannually on January 1 and July 1. The discount in connection with the issue was $120,000, which is being amortized monthly on a straight-line basis. The bonds are convertible after one year into 15 shares of Janenda Inc's $1 par value common stock for each $1,000 of bonds. On October 1, 2026, $600,000 of bonds were turned in for conversion into common stock. Interest has been accrued monthly and paid as due. At the time of conversion, any accrued interest on bonds being converted is paid in cash. Prepare the journal entries to record the conversion, amortization, and interest in connection with the bonds as of the following dates. (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. List all debit entries before credit entries.) (a) (b) (c) No. Date Account Titles and Explanation (a) October 1, 2026. (Assume the book value method is used.) October 31, 2026. December 31, 2026, including closing entries for end-of-year. (c) Oct. 1, 2026 Oct. 1. 2026 Oct. (b) 31, 2026 Oct. 31, 2026 Dec. 31, 2026 Dec. 31, 2026 Dec. 31, 2026 Bonds Payable Discount on Bonds Payable Common Stock Paid-in Capital in Excess of Par - Common Stock (To record conversion of bonds to common stock) Interest Expense Cash (To record payment of interest due on converted bonds) (To record amortization of discount on bonds) (To record accrual of interest payable on bonds) (To record amortization of discount on bonds) (To record accrual of interest payable on bonds) (To close expense account) Debit 600,000 15000 18000 Credit 15000 600000 18000
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