Sunland Corporation sold 190 convertible, 10-year bonds at par for $190,000. Each bond pays 5% annual interest and each bond can be converted to ten common shares at the bondholder's request. When the bonds were issued, the common shares were trading for $13 per share. The market rate of interest for similar bonds without conversion rights was 7%. Prepare the journal entry to record the issuance of the bonds. ( Round present value factor calculations to 5 decimal places, eg. 1.25124 and the final answers to O decimal places e.g. 58,971. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)

Sunland Corporation sold 190 convertible, 10-year bonds at par for $190,000. Each bond pays 5% annual interest and each bond can be converted to ten common shares at the bondholder's request. When the bonds were issued, the common shares were trading for $13 per share. The market rate of interest for similar bonds without conversion rights was 7%. Prepare the journal entry to record the issuance of the bonds. ( Round present value factor calculations to 5 decimal places, eg. 1.25124 and the final answers to O decimal places e.g. 58,971. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 15MCQ

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