On January 1, 2021, Gless Textiles issued $17 million of 10%, 20-year convertible bonds at 101. The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 40 shares of Gless's no par common stock. Bonds that are similar in all respects, except that they are nonconvertible, currently are selling at 99 (that is, 99% of face amount). Century Services purchased 20% of the issue as an investment. Required: 1. Prepare the journal entries for the issuance of the bonds by Gless and the purchase of the bond investment by Century. 2. Prepare the journal entries for the June 30, 2025, interest payment by both Gless and Century assuming both use the straight-line method. 3. On July 1, 2026, when Gless's common stock had a market price of $33 per share, Century converted the bonds it held. Prepare the journal entries by both Gless and Century for the conversion of the bonds (book value method). Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare the journal entries for the issuance of the bonds by Gless and the purchase of the bond investment by Century. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)
On January 1, 2021, Gless Textiles issued $17 million of 10%, 20-year convertible bonds at 101. The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 40 shares of Gless's no par common stock. Bonds that are similar in all respects, except that they are nonconvertible, currently are selling at 99 (that is, 99% of face amount). Century Services purchased 20% of the issue as an investment. Required: 1. Prepare the journal entries for the issuance of the bonds by Gless and the purchase of the bond investment by Century. 2. Prepare the journal entries for the June 30, 2025, interest payment by both Gless and Century assuming both use the straight-line method. 3. On July 1, 2026, when Gless's common stock had a market price of $33 per share, Century converted the bonds it held. Prepare the journal entries by both Gless and Century for the conversion of the bonds (book value method). Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare the journal entries for the issuance of the bonds by Gless and the purchase of the bond investment by Century. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:issue as an investment.
Required:
1. Prepare the journal entries for the issuance of the bonds by Gless and the purchase of the bond investment by Century.
2. Prepare the journal entries for the June 30, 2025, interest payment by both Gless and Century assuming both use the straight-line
method.
3. On July 1, 2026, when Gless's common stock had a market price of $33 per share, Century converted the bonds it held. Prepare the
journal entries by both Gless and Century for the conversion of the bonds (book value method).
Complete this question by entering your answers in the tabs below.
Required 1 Required 2 Required 3
On July 1, 2026, when Gless's common stock had a market price of $33 per share, Century converted the bonds it held. Prepare the
journal entries by both Gless and Century for the conversion of the bonds (book value method). (If no entry is required for a
transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)
View transaction list
1
Record the entry for Gless regarding the conversion of
the bonds.
2 Record the entry for Century regarding the conversion of
the bonds.
X
>
Transcribed Image Text:On January 1, 2021, Gless Textiles issued $17 million of 10%, 20-year convertible bonds at 101. The bonds pay interest on June 30 and
December 31. Each $1,000 bond is convertible into 40 shares of Gless's no par common stock. Bonds that are similar in all respects,
except that they are nonconvertible, currently are selling at 99 (that is, 99% of face amount). Century Services purchased 20% of the
issue as an investment.
Required:
1. Prepare the journal entries for the issuance of the bonds by Gless and the purchase of the bond investment by Century.
2. Prepare the journal entries for the June 30, 2025, interest payment by both Gless and Century assuming both use the straight-line
method.
3. On July 1, 2026, when Gless's common stock had a market price of $33 per share, Century converted the bonds it held. Prepare the
journal entries by both Gless and Century for the conversion of the bonds (book value method).
Complete this question by entering your answers in the tabs below.
Required 1 Required 2 Required 3
Prepare the journal entries for the issuance of the bonds by Gless and the purchase of the bond investment by Century. (If no entry is
required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)
View transaction list
1
Record the issuance of the bonds by Gless.
2 Record the purchase of the bond investment by Century.
X
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