Options were granted on July 1, 2019, to purchase 220,000 shares at $14 per share. Although no options were exercised during fiscal year 2020, the average price per common share during fiscal year 2020 was $20 per share. 1. Each bond was issued at face value. The 7% convertible bonds will convert into common stock at 50 shares per $1,000 bond. The bonds are exercisable after 5 years and were issued in fiscal year 2019. 2. 3. The preferred stock was issued in 2019. 4. There are no preferred dividends in arrears; however, preferred dividends were not declared in fiscal year 2020. 5. The 990,000 shares of common stock were outstanding for the entire 2020 fiscal year. 6. Net income for fiscal year 2020 was $1,520,000, and the average income tax rate is 20%. For the fiscal year ended June 30, 2020, calculate the following for Ayayai Pharmaceutical Industries. (Round answers to 2 decimal places, e.g. $2.45.) (a) Basic earnings per share. Basic earnings per share $ [b) Diluted earnings per share. Diluted earnings per share $

Options were granted on July 1, 2019, to purchase 220,000 shares at $14 per share. Although no options were exercised during fiscal year 2020, the average price per common share during fiscal year 2020 was $20 per share. 1. Each bond was issued at face value. The 7% convertible bonds will convert into common stock at 50 shares per $1,000 bond. The bonds are exercisable after 5 years and were issued in fiscal year 2019. 2. 3. The preferred stock was issued in 2019. 4. There are no preferred dividends in arrears; however, preferred dividends were not declared in fiscal year 2020. 5. The 990,000 shares of common stock were outstanding for the entire 2020 fiscal year. 6. Net income for fiscal year 2020 was $1,520,000, and the average income tax rate is 20%. For the fiscal year ended June 30, 2020, calculate the following for Ayayai Pharmaceutical Industries. (Round answers to 2 decimal places, e.g. $2.45.) (a) Basic earnings per share. Basic earnings per share $ [b) Diluted earnings per share. Diluted earnings per share $

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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On November 16, 2020, Bilbond issued its 10-year, 7% P1,000,000 convertible bonds at 122. The bonds would have sold for P1,154,435 without the conversion feature. The effective interest rate of similar bonds without the conversion feature is 5%. What is the increase in equity on the date of issuance?
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On December 31, 2019, OLGA Inc. sold convertible bonds to Nuttin Corp. for$38,375,000. The bonds have a face value of $40,000,000, a term of 10 years and coupon payments each June 30 and December 31 at 5% per annum. The yield to maturity on similar bonds without the conversion feature is 6%. The bonds areconvertible into 10 common shares for each $1,000 bond. OLGA Inc. reports under IFRS. Prepare the journal entry that OLGA Inc. should record for the issuance of these bonds at December 31, 2019
On July 1, 2020, Most Inc. issued $1,000,000 face value, 8% semiannual coupon bonds maturing in 10 years. The bonds pay interest on June 30 and December 31 of each year. The bonds were initially priced to yield 10% compounded semiannually. The bonds were issued for $875,378. What is the carrying value of these bonds on December 31, 2020 Select one: a. $835,378 b. $879,147 c. $1,000,000 d. $925,239 e. $893,225
On January 1,2020, ABC Company issued P 10,000,000 convertible bonds with a stated rate of 12% at 110. The principal of the bonds is payable on December 31, 2024. Interest on the bonds is payable annually starting December 31,2020. Each P 5,000 bond is convertible into 20 ordinary shares of P 50 par. Without the bond conversion privilege, the bonds would have sold to yield 10%.On December 31,2021 after paying periodic interests, half of the bonds issued were converted to ordinary shares. On October 1,2023, half of the remaining bonds were retired at 102 plus accrued interest. Without the bond conversion privilege, the bonds are quoted at 101.How much was credited to the share premium- ordinary account at the time of conversion of bonds on December 31,2021? (For present value factors, do not round off) P 1,000,000 P 4,369,606.52 P 4,639,606.52 P 5,248,685.20
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On January 1,2020, ABC Company issued P 10,000,000 convertible bonds with a stated rate of 12% at 110. The principal of the bonds is payable on December 31, 2024. Interest on the bonds is payable annually starting December 31,2020. Each P 5,000 bond is convertible into 20 ordinary shares of P 50 par. Without the bond conversion privilege, the bonds would have sold to yield 10%.On December 31,2021 after paying periodic interests, half of the bonds issued were converted to ordinary shares. On October 1,2023, half of the remaining bonds were retired at 102 plus accrued interest. Without the bond conversion privilege, the bonds are quoted at 101.How much is the gain or loss on retirement of bonds on October 1,2023?
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Auerbach Inc. issued 8% bonds on October 1, 2021. The bonds have a maturity date of September 30, 2031 and a face value of $300 million. The bonds pay interest each March 31 and September 30, beginning March 31, 2022. The effective interest rate established by the market was 10%. How much cash interest does Auerbach pay on March 31, 2022? (Round your answer to 2 decimal places.) Top of Form Multiple Choice $24.00 million. $12.00 million. $30.00 million. $15.00 million.
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On April 1, 2020, Dalton Ltd. issued a convertible $3,000,000, 25-year, 6% bond at 99. The bond is convertible at a rate of 10 common shares for each $1,000. Similar bonds trading on the market without this option carry an interest rate of 7%. Interest on the bond is paid semi-annually on April and October 1st each year, beginning in October 1, 2020. Dalton uses the effective interest method of amortizing discounts or premiums. REQUIRED: Prepare the journal entry to record the bond issuance using the residual value (incremental) method. Show all calculations. Prepare the journal entry for the first interest payment on October 1, 2020. Prepare the entry on Dalton’s books assuming that 60% of the bonds were converted immediately after the October 1, 2021 interest payment. Prepare the adjusting entry for the interest accrual on December 31, 2021. Prepare the journal entry for the interest payment on April 1, 2022 Prepare the entry on Dalton’s books on the maturity date of the bond.