Required Informatlon [The following information applies to the questions displayed below.] Mi-T-M Corporation is a leading designer and manufacturer of high quality industrial equipment. Mi-T- M Corporation issues $540,000 of 7% bonds on January 1, 2021 to finance operations. The bonds are due in 10 years. Interest is paid semiannually on June 30 and December 31. 2. If the market interest rate is 8%, the bonds will issue at $503,306. Record the bond issue on January 1, 2021, and the first two semiannual interest payments on June 30, 2021, and December 31, 2021. (If no entry Is requlred for a particular transactlon/event, select "No Journal Entry Requlred" In the first account fleld. Round your answers to the nearest dollar amount.) View transaction list Journal entry worksheet 1 3 > Record the bond issue. Note: Enter debits before credits. Date General Journal Debit Credit January 01, 2021

Required Informatlon [The following information applies to the questions displayed below.] Mi-T-M Corporation is a leading designer and manufacturer of high quality industrial equipment. Mi-T- M Corporation issues $540,000 of 7% bonds on January 1, 2021 to finance operations. The bonds are due in 10 years. Interest is paid semiannually on June 30 and December 31. 2. If the market interest rate is 8%, the bonds will issue at $503,306. Record the bond issue on January 1, 2021, and the first two semiannual interest payments on June 30, 2021, and December 31, 2021. (If no entry Is requlred for a particular transactlon/event, select "No Journal Entry Requlred" In the first account fleld. Round your answers to the nearest dollar amount.) View transaction list Journal entry worksheet 1 3 > Record the bond issue. Note: Enter debits before credits. Date General Journal Debit Credit January 01, 2021

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 January 1, 2021, Madison Products issued $70 million of 6%, 10-year convertible bonds at a net price of $70.9 million. Madison recently issued similar, but nonconvertible, bonds at 99 (that is, 99% of face amount). The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 30 shares of Madison's no par common stock. Madison records interest by the straight-line method. On June 1, 2023, Madison notified bondholders of its intent to call the bonds at face value plus a 1% call premium on July 1, 2023. By June 30 all bondholders had chosen to convert their bonds into shares as of the interest payment date. On June 30, Madison paid the semiannual interest and issued the requisite number of shares for the bonds being converted. In this question, combine the discount on the bonds with the face amount, and record the net amount as bonds payable. This is the "net method." When the net method is used, the discount (or premium) is amortized directly to the bonds…
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