Swifty Corporation has $3,810,000 of 9% convertible bonds outstanding. Each $1,000 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, 2021, the holders of $1,270,000 bonds exercised the conversion privilege. On that date, the market price of the bonds was 104 and the market price of the common stock was $35. The total unamortized bond premium at the date of conversion was $276,000. As a result of this conversion, what should Swifty record?
Swifty Corporation has $3,810,000 of 9% convertible bonds outstanding. Each $1,000 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, 2021, the holders of $1,270,000 bonds exercised the conversion privilege. On that date, the market price of the bonds was 104 and the market price of the common stock was $35. The total unamortized bond premium at the date of conversion was $276,000. As a result of this conversion, what should Swifty record?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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LO1. Swifty Corporation has $3,810,000 of 9% convertible bonds outstanding. Each $1,000 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, 2021, the holders of $1,270,000 bonds exercised the conversion privilege. On that date, the market price of the bonds was 104 and the market price of the common stock was $35. The total unamortized bond premium at the date of conversion was $276,000. As a result of this conversion, what should Swifty record?
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