Maple Corp. issued $100,000 of 8%, 10-year convertible bonds. Each $1,000 bond is convertible into 2 sh common stock ($1 par value per share) of Maple Corp. The bonds were sold at 97 on January 1, 2020. Assume that the conversion feature for 75% of the bonds is exercised on December 31, 2020, after Maple payments of $10,000 to shareholders to induce conversion. Assume that any discount or premium has bee through the date of conversion using the straight-line interest method. The common stock is selling at $8C on December 31, 2020. Please prepare journal entries for the following transactions: 1. The issuance of the convertible bonds on January 1, 2020, 2. The conversion of 75% of the bonds to common stock on December 31, 2020

Maple Corp. issued $100,000 of 8%, 10-year convertible bonds. Each $1,000 bond is convertible into 2 sh common stock ($1 par value per share) of Maple Corp. The bonds were sold at 97 on January 1, 2020. Assume that the conversion feature for 75% of the bonds is exercised on December 31, 2020, after Maple payments of $10,000 to shareholders to induce conversion. Assume that any discount or premium has bee through the date of conversion using the straight-line interest method. The common stock is selling at $8C on December 31, 2020. Please prepare journal entries for the following transactions: 1. The issuance of the convertible bonds on January 1, 2020, 2. The conversion of 75% of the bonds to common stock on December 31, 2020

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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