Current Attempt in Progress Coronado Corporation has outstanding 2,200 $1,000 bonds, each convertible into 70 shares of $10 par value common stock. The bonds are converted on December 31, 2020, when the unamortized discount is $24,100 and the market price of the stock is $21.per share. Record the conversion using the book value approach. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts) Account Titles and Explanation Save for Later Debit Credit Attempts: unlimited Submit Answer

Current Attempt in Progress Coronado Corporation has outstanding 2,200 $1,000 bonds, each convertible into 70 shares of $10 par value common stock. The bonds are converted on December 31, 2020, when the unamortized discount is $24,100 and the market price of the stock is $21.per share. Record the conversion using the book value approach. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts) Account Titles and Explanation Save for Later Debit Credit Attempts: unlimited Submit Answer

Name: Sh1 Current Attempt in ProgressCoronado Corporation has outstanding 2,
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Description: Sh1 Current Attempt in ProgressCoronado Corporation has outstanding 2,200 $1,000 bonds, each convertible into 70 shares of $10 par value common stock. Thebonds are converted on December 31, 2020, when the unamortized discount is $24,100 and the marke

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 28E

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On July 2, 2018, McGraw Corporation issued 500,000 of convertible bonds. Each 1,000 bond could be converted into 20 shares of the companys 5 par value stock. On July 3, 2020, when the bonds had an unamortized discount of 7,400 and the market value of the McGraw shares was 52 per share, all the bonds were converted into common stock. Required: 1. Prepare the journal entry to record the conversion of the bonds under (a) the book value method and (b) the market value method. 2. Compute the companys debt-to-equity ratio (total liabilities divided by total shareholders equity, as described in Chapter 6) under each alternative. Assume the companys other liabilities are 2 million and shareholders equity before the conversion is 3 million. 3. Assume the company uses IFRS and issued the bonds for 487,500 on July 2, 2018. On this date, it determined that the fair value of each bond was 930 and the fair value of the conversion option was 45 per bond. Prepare the journal entry to record the issuance of the bonds.
Waseca Company had 5 convertible securities outstanding during all of 2019. It paid the appropriate interest (and amortized any related premium or discount using the straight line method) and dividends on each security during 2019. Each of the convertible securities is described in the following table: Additional data: Net income for 2019 totaled 119,460. The weighted average number of common shares outstanding during 2019 was 40,000 shares. No share options or warrants arc outstanding. The effective corporate income tax rate is 30%. Required: 1. Prepare a schedule that lists the impact of the assumed conversion of each convertible security on diluted earnings per share. 2. Prepare a ranking of the order in which each of the convertible securities should be included in diluted earnings per share. 3. Compute basic earnings per share. 4. Compute diluted earnings per share. 5. Indicate the amount(s) of the earnings per share that Waseca would report on its 2019 income statement.
Percy Company has 15,000 shares of common stock outstanding during all of 2019. It also has 2 convertible securities outstanding at the end of 2019. These are: 1. Convertible preferred stock: 1,000 shares of 9%, 100 par, preferred stock were issued in 2015 for 140 per share. Each share of preferred stock is convertible into 3.5 shares of common stock. The current dividends have been paid. To date, no preferred stock has been converted. 2. Convertible bonds: Bonds with a face value of 100,000 and an interest rate of 10% were issued at par on July 1, 2019. Each 1,000 bond is convertible into 35 shares of common stock. To date, no bonds have been converted. Percy earned net income of 54,000 during 2019. Its income tax rate is 30%. Required: Compute the 2019 diluted earnings per share. What earnings per share amount(s) would Percy report on its 2019 income statement?
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