October 1, 2013: issued $6,000,000 of "20" year convertible bonds. The bonds pay an annual rate of interest of 5%, payable semi-annually on April 1 st and October 1 st each year. The bonds were issued with a premium of $180,000. The premium is being amortized on a straight line basis. The bonds can be converted on any date after 4 years from their issue date, into 10 shares of Tapco's $5 par value common stock for each $1,000 of bonds. On December 1, 2017 $1,200,000 of bonds were turned in for conversion. Accrued interest on the bonds being converted was also paid to the holders at the time of the conversion. The company's stock was selling for $205 per share on the date of the conversion. On May1, 2018 $480,000 of bonds were turned in for conversion. Accrued interest on the bonds being converted was also paid to the holders at the time of the conversion. The company's stock was selling for $235 per share on the date of the conversion. Tapco Plastics Corporation has a year end of December 31 st. Prepare all journal entries pertaining to these bonds for the dates below: October 1, 2017 December 1, 2017 May 1, 2018 December 31, 2018 April 1, 2019
October 1, 2013: issued $6,000,000 of "20" year convertible bonds. The bonds pay an annual rate of interest of 5%, payable semi-annually on April 1 st and October 1 st each year. The bonds were issued with a premium of $180,000. The premium is being amortized on a straight line basis. The bonds can be converted on any date after 4 years from their issue date, into 10 shares of Tapco's $5 par value common stock for each $1,000 of bonds. On December 1, 2017 $1,200,000 of bonds were turned in for conversion. Accrued interest on the bonds being converted was also paid to the holders at the time of the conversion. The company's stock was selling for $205 per share on the date of the conversion. On May1, 2018 $480,000 of bonds were turned in for conversion. Accrued interest on the bonds being converted was also paid to the holders at the time of the conversion. The company's stock was selling for $235 per share on the date of the conversion. Tapco Plastics Corporation has a year end of December 31 st. Prepare all journal entries pertaining to these bonds for the dates below: October 1, 2017 December 1, 2017 May 1, 2018 December 31, 2018 April 1, 2019
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:October 1, 2013: issued $6,000,000 of "20" year convertible bonds. The bonds pay an annual rate of
interest of 5%, payable semi-annually on April 1 st and October 1 st each year. The bonds were issued
with a premium of $180,000. The premium is being amortized on a straight line basis. The bonds can
be converted on any date after 4 years from their issue date, into 10 shares of Tapco's $5 par value
common stock for each $1,000 of bonds.
On December 1, 2017 $1,200,000 of bonds were turned in for conversion. Accrued interest on the
bonds being converted was also paid to the holders at the time of the conversion. The company's
stock was selling for $205 per share on the date of the conversion.
On May1, 2018 $480,000 of bonds were turned in for conversion. Accrued interest on the bonds
being converted was also paid to the holders at the time of the conversion. The company's stock was
selling for $235 per share on the date of the conversion.
Tapco Plastics Corporation has a year end of December 31 st. Prepare all journal entries pertaining to
these bonds for the dates below:
October 1, 2017 December 1, 2017
May 1, 2018
December 31, 2018
April 1, 2019
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