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Oct. (a) 1. Bonds Payable 2026 Discount on Bonds Payable Common Stock Pald-In Capital In Excess of Par - Common Stock (To record conversion of bonds to common stock) Oct. 1. Interest Payable 2026 cash Oct. (b) 31. (To record payment of interest due on converted bonds) Interest Expense 2026 Oct. 31. 2026 Discount on Bonds Payable (To record amortization of discount on bonds) Interest Expense Dec. (c) 31. Interest Payable (To record accrual of interest payable on bonds) Interest Expense 2026 Discount on Bonds Payable 504000 7560 1496 18480 1700 9180 7560 487260 7560 1496 18480 1700 Dec. c) 31 2026 Interest Expense Dec. 31. 2026 Discount on Bonds Payable (To record amortization of discount on bonds) Interest Expense Dec. Interest Payable (To record accrual of interest payable on bonds) 31. Income Summary 2026 Interest Expense (To close expense account) 1700 126360 264220 1700 126360 264220

Oct. (a) 1. Bonds Payable 2026 Discount on Bonds Payable Common Stock Pald-In Capital In Excess of Par - Common Stock (To record conversion of bonds to common stock) Oct. 1. Interest Payable 2026 cash Oct. (b) 31. (To record payment of interest due on converted bonds) Interest Expense 2026 Oct. 31. 2026 Discount on Bonds Payable (To record amortization of discount on bonds) Interest Expense Dec. (c) 31. Interest Payable (To record accrual of interest payable on bonds) Interest Expense 2026 Discount on Bonds Payable 504000 7560 1496 18480 1700 9180 7560 487260 7560 1496 18480 1700 Dec. c) 31 2026 Interest Expense Dec. 31. 2026 Discount on Bonds Payable (To record amortization of discount on bonds) Interest Expense Dec. Interest Payable (To record accrual of interest payable on bonds) 31. Income Summary 2026 Interest Expense (To close expense account) 1700 126360 264220 1700 126360 264220

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 7P: Wilbury Corporation issued 1 million of 13.5% bonds for 985,071.68. The bonds are dated and issued...
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Buffalo Inc. issued $4,200,000 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 $102,000, which is being amortized monthly on a straight-line basis.

The bonds are convertible after one year into 15 shares of Buffalo Inc's $1 par value common stock for each $1,000 of bonds.

On October 1, 2026, $504,000 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.

Oct. (a) 1. Bonds Payable 2026 Discount on Bonds Payable Common Stock Pald-In Capital In Excess of Par - Common Stock (To record conversion of bonds to common stock) Oct. 1. Interest Payable 2026 cash Oct. (b) 31. (To record payment of interest due on converted bonds) Interest Expense 2026 Oct. 31. 2026 Discount on Bonds Payable (To record amortization of discount on bonds) Interest Expense Dec. (c) 31. Interest Payable (To record accrual of interest payable on bonds) Interest Expense 2026 Discount on Bonds Payable 504000 7560 1496 18480 1700 9180 7560 487260 7560 1496 18480 1700
Transcribed Image Text:Oct. (a) 1. Bonds Payable 2026 Discount on Bonds Payable Common Stock Pald-In Capital In Excess of Par - Common Stock (To record conversion of bonds to common stock) Oct. 1. Interest Payable 2026 cash Oct. (b) 31. (To record payment of interest due on converted bonds) Interest Expense 2026 Oct. 31. 2026 Discount on Bonds Payable (To record amortization of discount on bonds) Interest Expense Dec. (c) 31. Interest Payable (To record accrual of interest payable on bonds) Interest Expense 2026 Discount on Bonds Payable 504000 7560 1496 18480 1700 9180 7560 487260 7560 1496 18480 1700
Dec. c) 31 2026 Interest Expense Dec. 31. 2026 Discount on Bonds Payable (To record amortization of discount on bonds) Interest Expense Dec. Interest Payable (To record accrual of interest payable on bonds) 31. Income Summary 2026 Interest Expense (To close expense account) 1700 126360 264220 1700 126360 264220
Transcribed Image Text:Dec. c) 31 2026 Interest Expense Dec. 31. 2026 Discount on Bonds Payable (To record amortization of discount on bonds) Interest Expense Dec. Interest Payable (To record accrual of interest payable on bonds) 31. Income Summary 2026 Interest Expense (To close expense account) 1700 126360 264220 1700 126360 264220
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