Mecca Energy Corp. issued a convertible bond on 1 August 20X9. The 10-year, 5% $16,000,000 bond pays interest semi-annually each 31 July and 31 January. At maturity, each $1,000 bond is convertible into 120 common shares. The bond was issued for $16,640,000. Market interest rates were approximately 6%. PV of $1, PVA of $1, and PVAD of $1.) (Use appropriate factor(s) from the tables provided.) Required: 1. Provide the journal entry to record the initial issuance of the bond. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your time value to 5 decimal places and your final answers to the nearest whole dollar.) View transaction list Journal entry worksheet 1 Record the entry for issuance of bonds. Note: Enter debits before credits. Transaction 1 General Journal Debit Credit 2. Assume instead that the bond was convertible into common shares at the maturity date into common shares based on the market value of common shares at that time. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 Record the entry for issuance of bonds. Note: Enter debits before credits. Transaction 1 General Journal Debit Credit
Mecca Energy Corp. issued a convertible bond on 1 August 20X9. The 10-year, 5% $16,000,000 bond pays interest semi-annually each 31 July and 31 January. At maturity, each $1,000 bond is convertible into 120 common shares. The bond was issued for $16,640,000. Market interest rates were approximately 6%. PV of $1, PVA of $1, and PVAD of $1.) (Use appropriate factor(s) from the tables provided.) Required: 1. Provide the journal entry to record the initial issuance of the bond. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your time value to 5 decimal places and your final answers to the nearest whole dollar.) View transaction list Journal entry worksheet 1 Record the entry for issuance of bonds. Note: Enter debits before credits. Transaction 1 General Journal Debit Credit 2. Assume instead that the bond was convertible into common shares at the maturity date into common shares based on the market value of common shares at that time. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 Record the entry for issuance of bonds. Note: Enter debits before credits. Transaction 1 General Journal Debit Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Mecca Energy Corp. issued a convertible bond on 1 August 20X9. The 10-year, 5% $16,000,000 bond pays interest semi-annually each
31 July and 31 January. At maturity, each $1,000 bond is convertible into 120 common shares. The bond was issued for $16,640,000.
Market interest rates were approximately 6%.
PV of $1, PVA of $1, and PVAD of $1.) (Use appropriate factor(s) from the tables provided.)
Required:
1. Provide the journal entry to record the initial issuance of the bond. (If no entry is required for a transaction/event, select "No
journal entry required" in the first account field. Round your time value to 5 decimal places and your final answers to the nearest
whole dollar.)
View transaction list
Journal entry worksheet
1
Record the entry for issuance of bonds.
Note: Enter debits before credits.
Transaction
1
General Journal
Debit
Credit
Transcribed Image Text:2. Assume instead that the bond was convertible into common shares at the maturity date into common shares based on the market
value of common shares at that time. (If no entry is required for a transaction/event, select "No journal entry required" in the first
account field.)
View transaction list
Journal entry worksheet
1
Record the entry for issuance of bonds.
Note: Enter debits before credits.
Transaction
1
General Journal
Debit
Credit
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