Four years after issue, debentures with a face value of$1,000,000 and book value of $960,000 are tendered forconversion into 80,000 shares of common stock immediatelyafter an interest payment date. At that time, themarket price of the debentures is 104, and the commonstock is selling at $14 per share (par value $10). The companyrecords the conversion as follows.Bonds Payable -1,000,000Discount on Bonds Payable - 40,000Common Stock - 800,000Paid-in Capital in Excess of Par—Common Stock - 160,000Discuss the propriety of this accounting treatment.

Q: On January 1,2020, V Co. issued 100 share options to each of its 15 executive officers. The options…

A: Compensation expense = Number of employees × Number of options granted × Fair value ×Expired…

Q: On July 1, 2021, Funk Company has 400,000 shares of P25 par ordinary outstanding and the market…

A: No. of treasury shares after split = treasury shares x 5/1 = 50000  x 5/1 = 250,000 shares

Q: On January 1, 2019, when its $30 par value common stock was selling for $80 per share, Flounder…

A: Journal entries are an act of recording transactions consisting of a debit and a credit side.

Q: On July 1, 2019, when its $1 par value common stock was selling for $66 per share, Kingbird Corp.…

A: Particulars Debit Credit Cash a/c               Dr $26,394,000           To 6%…

Q: On January 1, 2015, when its $30 par value common stock was selling for $80 per share, a corporation…

A: The question is based on the concept of Financial Accounting.

Q: on June 30 and December 31. Each $1,000 debenture can be converted into 4 common shares of Cullumber…

A: Journal entries refer to the process of collecting and recording all the transactions of a company…

Q: Show your solution in good accounting form. On July 1, 2021, after recording interest and…

A: Analysis:  Incase of conversion of convertible bonds into ordinary shares, share premium will be…

Q: On January 1, 2020, when the fair value of its common shares was $85 per share, Cullumber Corp.…

A: 1. Journal entry for original issuance of convertible debentures   Debit credit Cash Dr…

Q: Point Company issued 25,000 shares of its P50 par ordinary and 40,000 shares of its P25 redeemable…

A: Here in this question, we are required to determine the share premium of equity shares. When equity…

Q: On January 1, 2016, Adams-Meneke Corporation granted 25 million incentive stock options to division…

A: 1. Compensation cost of options = Number of stock options x Fair value of stock options =…

Q: On January 1,2020, V Co. issued 100 share options to each of its 15 executive officers. The options…

A: An employee stock option gives the right to employees to purchase a pre specified number of shares…

Q: On July 1, 2021, Funk Company has 400,000 shares of P25 par ordinary outstanding and the market…

A: No. of treasury shares after split = treasury shares x 5/1 = 50000  x 5/1 = 250,000 shares

Q: On January 1, 2021, Starlight Company converted $150,000 bonds into 90,000 shares of $1 par value…

A: The bonds are the financial instruments used by the business to raise money from the investors of…

Q: On August 31, 2015, Chickasaw Industries issued $25 million of its 30-year, 6% convertible bonds…

A: 1.

Q: On January 1, 2020, when the fair value of its common shares was $80 per share, Pharoah Corp. issued…

A: Conversion of Bonds It is the method  of converting  a bond into shares. It  is dependent on…

Q: Four years after issue, debentures with a face value of $1,000,000 and book value of $960,000 are…

A:

Q: Petrenko Corporation has outstanding 2,000 $1,000 bonds, each convertible into 50 shares of $10 par…

A: Under the book value approach of recording conversion, the issuance of shares in place of bonds or…

Q: On July 1, 2021, Funk Company has 400,000 shares of P25 par ordinary outstanding and the market…

A: No. of treasury shares after split = treasury shares x 5/1 = 50000  x 5/1 = 250,000 shares

Q: Prepare the journal entry to record the original issuance of the convertible debentures. 2. Prepare…

A:

Q: On January 1, 2020, Oriole Corporation issued $6 million of 10-year, 7% convertible debentures at…

A: On 01.01.2020, Oriole corporation issued convertible debentures 10 year, 7% convertible debentures =…

Q: On January 1, 2019, when its $30 par value common stock was selling for $80 per share, Nash Corp.…

A: The journal entries would be as follows:

Q: On January 1, 2018, Adams-Meneke Corporation granted 25 million incentive stock options to division…

A: 1) Total Compensation cost on January 1, 2018 = No. of Stock options*Fair Value of Option Total…

Q: On January 1, 2020, ABC Company issued its 10%, 5-year, P3,000,000 convertible bonds for the face…

A: Bond is a debt security which is issued by large organization to raise the fund. Bond is a cheaper…

Q: amount credited to share premium from ordinary shares?

A: Total amount of issue P3,000,000 Less Ordinary shares at par value (25,000 shares @P50)…

Q: On January 1, 2020, Gottlieb Corporation issued $3,860,000 of 10-year, 8% convertible debentures at…

A: When the bonds are issued at a price more than the face value, they are said to be issued at a…

Q: Mae Jong Corp. issues $1,000,000 of 10% bonds payable which may be converted into 10,000 shares of…

A: Bonds: Bonds are debts instruments issued by corporates. Bonds are issued at par, premium and…

Q: Four years after issue, debentures with a face value of $1,000,000 and book value of $960,000 are…

A: Discuss the propriety of the preceding accounting treatment. The method employed by the corporation…

Q: On January 1, 2020, Crane Corporation issued $8 million of 10-year, 7% convertible debentures at…

A: Convertible bonds are defined as the bonds that the holder or receiver can convert these bonds into…

Q: On August 1, 2019, Kobe Corporation received subscription for 7,000 shares of Ordinary Share…

A: Company means the form of business where management is separately from owner and have perpetual…

Q: In the financial year to June 30, 2021, HIFI Ltd issued options for 400,000 shares. During that…

A: Earnings per share are the amount of net income that is held in hands of each shareholder of the…

Q: On January 1, 2020, Crane Corporation issued $8 million of 10-year,7% convertible debentures at 106.…

A: Bonds payable is a liability account that contains vthe amount owned to bond holders by the issuers.

Q: On January 1, the company issued $2.5 million of six-year, zero-interest-bearing notes along with…

A: On 01.01, Company issued 6 year, 0% Notes = $2.5 million Along with Warrants to buy common shares =…

Q: Hawk would record the following journal entry at the time of conversion:

A: Journal entries refers to the official book of a company which is used to record the day to day…

Q: On January 1, 2020, Riverbed Corporation issued $3,600,000 of 10-year, 8% convertible debentures at…

A: Journal Entries: No. Date Account Titles and Explanation Debit ($) Credit ($) (a)…

Q: A company has outstanding 366 $1,000 bonds, each convertible into 28 shares of $12 par value common…

A: Bonds payable = 366 * $ 1000 = $ 366000 Common Stock = 366 * 28 shares * $ 12 par value = $ 122976

Q: On January 1, 2019, when its $30 par value common stock was selling for $80 per share, Ivanhoe Corp.…

A: Convertible Debentures: A debenture holder is a creditor of the company.Any debenture is a long term…

Q: On July 1, 2019, when its $1 par value common stock was selling for $66 per share, Marin Corp,…

A: Date Account Titles and Explanation Debit Credit July 1, 2019 Cash $ 27,348,000…

Q: On January 1, 2020, Gottlieb Corporation issued $4,000,000 of 10-year, 8% convertible debentures at…

A: Introduction Debenture is a debt capital. Usually the return from debenture is interest and this…

Q: Jungkook Corporation was authorized to issue 10,000 preference shares ofP200 par value and 100,000…

A: Formula: Share premium = Issued price - Par value

Q: On July 1, 2021, Funk Company has 400,000 shares of P25 par ordinary outstanding and the market…

A: No. of treasury shares after split = treasury shares x 5/1 = 50000  x 5/1 = 250,000 shares

Q: Raven Co. has just gone public. Under a firm commitment agreement, Raven received $21.39 for each of…

A: The cost that is incurred by the company while offering its securities to the public is referred to…

Q: An entity issued 1 500 debentures with face value of R20 000 each. The coupon rate on the debentures…

A: Interest  to the investor  will be paid on face value.

Q: On July 1, 2021, Funk Company has 400,000 shares of P25 par ordinary outstanding and the market…

A: General Journal   Debit   Credit  Cash [(50,000 shares * 5 *50%) * P10] P12,50,000…

Q: On July 1, 2021, Funk Company has 400,000 shares of P25 par ordinary outstanding and the market…

A: No. of treasury shares after split = treasury shares x 5/1 = 50000  x 5/1 = 250,000 shares

Q: Four years after issue, debentures with a face value of $1,000,000 and book value of $960,000 are…

A:

Q: Four years after issue, debentures with a face value of $1,000,000 and book value of $960,000 are…

A: