Ma1.On January 1, 2001. Toy inc issued $500,000 of convertible bonds. The bonds mature on December 31, 20x5 interest is payable annually at 6.0% on December 31. The bonds are convertible at the investor's option at the rate of 20 common shares for each $1,000 bond. Similar bonds without the conversion option were selling for $475.000 at time of issuance Transaction costs of $10.000 were incurred Required Prepare the journal entry to record the issuance of the bonds On January 1, 20x1, Toy inc. issued $500,000 of convertible bonds. The bonds mature on December 31, 20X5. Interest is payable annually at 6.0% on December31. The bonds are convertible at the investor's option at the rate of 20 common shares for each $1,000 bond. Similar bonds without the conversion option wereselling for $475,000 at time of issuance, Transaction costs of $10,000 were incurred.RequiredPrepare the journal entry to record the issuance of the bonds.

Discount on issue of bond: If coupon rate of bond is less than market rate when similar bonds are…

Answered: On January 1, 20x1, Toy inc. issued…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Ma1.

On January 1, 2001. Toy inc issued $500,000 of convertible bonds. The bonds mature on December 31, 20x5 interest is payable annually at 6.0% on December 31. The bonds are convertible at the investor's option at the rate of 20 common shares for each $1,000 bond. Similar bonds without the conversion option were selling for $475.000 at time of issuance Transaction costs of $10.000 were incurred

Required

Prepare the journal entry to record the issuance of the bonds

On January 1, 20x1, Toy inc. issued $500,000 of convertible bonds. The bonds mature on December 31, 20X5. Interest is payable annually at 6.0% on December
31. The bonds are convertible at the investor's option at the rate of 20 common shares for each $1,000 bond. Similar bonds without the conversion option were
selling for $475,000 at time of issuance, Transaction costs of $10,000 were incurred.
Required
Prepare the journal entry to record the issuance of the bonds.

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