On May 1, 2016, Maine Co. issued 10-year convertible bonds at 103. During 2018, the bonds were converted into common stock. Maine prepares its financial statements according to International Accounting Standards (IFRS). On May 1, 2016, cash proceeds from the issuance of the convertible bonds should be reported as a. A liability for the entire proceeds. b. Paid-in capital for the entire proceeds. c. Paid-in capital for the portion of the proceeds attributable to the conversion feature and as a liability for the balance. d. A liability for the face amount of the bonds and paid-in capital for the premium over the par value.
On May 1, 2016, Maine Co. issued 10-year convertible bonds at 103. During 2018, the bonds were converted into common stock. Maine prepares its financial statements according to International Accounting Standards (IFRS). On May 1, 2016, cash proceeds from the issuance of the convertible bonds should be reported as a. A liability for the entire proceeds. b. Paid-in capital for the entire proceeds. c. Paid-in capital for the portion of the proceeds attributable to the conversion feature and as a liability for the balance. d. A liability for the face amount of the bonds and paid-in capital for the premium over the par value.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On May 1, 2016, Maine Co. issued 10-year convertible bonds at 103. During 2018, the bonds were converted into common stock. Maine prepares its financial statements according to International Accounting Standards (IFRS). On May 1, 2016, cash proceeds from the issuance of the convertible bonds should be reported as a. A liability for the entire proceeds. b. Paid-in capital for the entire proceeds. c. Paid-in capital for the portion of the proceeds attributable to the conversion feature and as a liability for the balance. d. A liability for the face amount of the bonds and paid-in capital for the premium over the par value.
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