Sandhill Co. has $3890000 of 7% convertible bonds outstanding. Each $1000 bond is convertible common stock. The bonds pay interest on January 31 and July 31. On July 31, 2025, the holders o conversion privilege. On that date, the market price of the bonds was 105 and the market price of total unamortized bond premium at the date of conversion was $288000. Sandhill should record, O loss of $11670. O credit of $176700.00 to Paid-in Capital in Excess of Par. O credit of $203100 to Paid-in Capital in Excess of Par. O credit of $92160 to Premium on Bonds Payable.
Sandhill Co. has $3890000 of 7% convertible bonds outstanding. Each $1000 bond is convertible common stock. The bonds pay interest on January 31 and July 31. On July 31, 2025, the holders o conversion privilege. On that date, the market price of the bonds was 105 and the market price of total unamortized bond premium at the date of conversion was $288000. Sandhill should record, O loss of $11670. O credit of $176700.00 to Paid-in Capital in Excess of Par. O credit of $203100 to Paid-in Capital in Excess of Par. O credit of $92160 to Premium on Bonds Payable.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Sandhill Co. has $3890000 of 7% convertible bonds outstanding. Each $1000 bond is convertible into 30 shares of $30 par value
common stock. The bonds pay interest on January 31 and July 31. On July 31, 2025, the holders of $1167000 bonds exercised the
conversion privilege. On that date, the market price of the bonds was 105 and the market price of the common stock was $37. The
total unamortized bond premium at the date of conversion was $288000. Sandhill should record, as a result of this conversion, a
O loss of $11670.
O credit of $176700.00 to Paid-in Capital in Excess of Par.
O credit of $203100 to Paid-in Capital in Excess of Par.
O credit of $92160 to Premium on Bonds Payable.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F010038b3-d611-4e56-a993-19c84e1cf0d0%2F97dbd5dd-c677-44de-830f-c5233d2662fd%2Fndla6x_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Sandhill Co. has $3890000 of 7% convertible bonds outstanding. Each $1000 bond is convertible into 30 shares of $30 par value
common stock. The bonds pay interest on January 31 and July 31. On July 31, 2025, the holders of $1167000 bonds exercised the
conversion privilege. On that date, the market price of the bonds was 105 and the market price of the common stock was $37. The
total unamortized bond premium at the date of conversion was $288000. Sandhill should record, as a result of this conversion, a
O loss of $11670.
O credit of $176700.00 to Paid-in Capital in Excess of Par.
O credit of $203100 to Paid-in Capital in Excess of Par.
O credit of $92160 to Premium on Bonds Payable.
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