Sandhill Co. has $3890000 of 7% convertible bonds outstanding. Each $1000 bond is convertible into 30 shares of $30 par valuecommon stock. The bonds pay interest on January 31 and July 31. On July 31, 2025, the holders of $1167000 bonds exercised theconversion privilege. On that date, the market price of the bonds was 105 and the market price of the common stock was $37. Thetotal unamortized bond premium at the date of conversion was $288000. Sandhill should record, as a result of this conversion, aO 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.

The Amount on Bonds payable and the premium on bonds payable Both are accounted as liabilities and…

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.

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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