On December 1, Y4, Boston Corp. issued $4,600,000 (par value), 12%, 5-year convertible bonds for $4,950,000. Interest is payable December 1 and June 1. If the bonds had not been convertible, they would have sold for $4,890,000. Bond premium/discount is amortized each interest period on a straight-line basis. Boston reports under IFRS. Boston’s fiscal year end is September 30. On June 1, Y6, 65% of these bonds were converted into 42,000 no par common shares. At that time shares were trading at $100 per share. Instructions a. Prepare the entry to record the issue of the bonds on December 1, Y4. b. Prepare the entry to record the conversion on June 1, Y6.
On December 1, Y4, Boston Corp. issued $4,600,000 (par value), 12%, 5-year convertible bonds for $4,950,000. Interest is payable December 1 and June 1. If the bonds had not been convertible, they would have sold for $4,890,000. Bond premium/discount is amortized each interest period on a straight-line basis. Boston reports under IFRS. Boston’s fiscal year end is September 30. On June 1, Y6, 65% of these bonds were converted into 42,000 no par common shares. At that time shares were trading at $100 per share. Instructions a. Prepare the entry to record the issue of the bonds on December 1, Y4. b. Prepare the entry to record the conversion on June 1, Y6.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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| On December 1, Y4, Boston Corp. issued $4,600,000 (par value), 12%, 5-year convertible bonds for $4,950,000. Interest is payable December 1 and June 1. If the bonds had not been convertible, they would have sold for $4,890,000. Bond premium/discount is amortized each interest period on a straight-line basis. Boston reports under IFRS. Boston’s fiscal year end is September 30. | |
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| On June 1, Y6, 65% of these bonds were converted into 42,000 no par common shares. At that time shares were trading at $100 per share. | |
| Instructions | |
| a. Prepare the entry to record the issue of the bonds on December 1, Y4. | |
| b. Prepare the entry to record the conversion on June 1, Y6. |
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