General Corporation purchased $938,000 of bonds with a coupon rate of 10% at face value on December 5, 2021. The market price of the bond was $984,000 on December 31, 2021. Required: Prepare the appropriate Journal entry on December 31, 2021, to properly value the bonds assuming the bonds are classified as: (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Ignore the journal entry for coupon payment and Interest recognition. 1. Trading securities. 2. Securities available-for-sale. 3. Held-to-maturity securities. View transaction list Journal entry worksheet 1 2 3 <> Record the unrealized holding gain or loss for trading securitles. Note: Enter debits before credits. Transaction General Journal Debit Credit

General Corporation purchased $938,000 of bonds with a coupon rate of 10% at face value on December 5, 2021. The market price of the bond was $984,000 on December 31, 2021. Required: Prepare the appropriate Journal entry on December 31, 2021, to properly value the bonds assuming the bonds are classified as: (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Ignore the journal entry for coupon payment and Interest recognition. 1. Trading securities. 2. Securities available-for-sale. 3. Held-to-maturity securities. View transaction list Journal entry worksheet 1 2 3 <> Record the unrealized holding gain or loss for trading securitles. Note: Enter debits before credits. Transaction General Journal Debit Credit

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

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 21E: On July 2, 2018, McGraw Corporation issued 500,000 of convertible bonds. Each 1,000 bond could be...

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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.
Kiley Corporation had these transactions during 2022.Analyze the transactions and indicate whether each transaction is an operating activity, investing activity, financing activity, or noncash investing and financing activity. (a) Purchased a machine for $30,000, giving a long-term note in exchange. select an option (b) Issued $50,000 par value common stock for cash. select an option (c) Issued $200,000 par value common stock upon conversion of bonds having a face value of $200,000. select an option (d) Declared and paid a cash dividend of $13,000. select an option (e) Sold a long-term investment with a cost of $15,000 for $15,000 cash. select an option…
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The balance sheet at December 31, 2024, for Nevada Harvester Corporation includes the liabilities listed below: 10% bonds with a face amount of $42 million were issued for $42 million on October 31, 2015. The bonds mature on October 31, 2035. Bondholders have the option of calling (demanding payment on) the bonds on October 31, 2025, at a redemption price of $42 million. Market conditions are such that the call is not expected to be exercised. Management intended to refinance $8.7 million of its 9% notes that mature in May 2025. In early March, prior to the actual issuance of the 2024 financial statements, Nevada Harvester negotiated a line of credit with a commercial bank for up to $6.5 million any time during 2025. Any borrowings will mature two years from the date of borrowing. Noncallable 10% bonds with a face amount of $18.2 million were issued for $18.2 million on September 30, 2005. The bonds mature on September 30, 2025. Sufficient cash is expected to be available to retire…
Donnie Ltd. issued 10-year, $81 million face value debentures on October 1, 2013. The bonds mature on September 30, 2023. The annual stated (coupon) rate is 5%, and interest must be paid semi-annually on March 31 and September 30. The annual market rate was 4% for similar bonds at the time of issuance. Donnie's fiscal year ends on December 31. Donnie uses the effective interest method, in accordance with GAAP requirements. Required (Round all numbers to the nearest dollar). Use Excel to solve the exercise 1. Calculate the proceeds from the bond issue and show in good form Donnie's journal entry to record the transaction on October 1, 2013. 2. Prepare in good form a partial Statement of Financial Position as at December 31, 2013 for Donnie Ltd., to show how the outstanding debentures are presented. 3. Prepare the journal entry to record the transaction on March 31, 2014. 4. Assume that Donnie redeems 70% of the bonds for cash "at 101" immediately after paying the interest on March 31,…
On January 1, 2021, This Company issues bonds with face amount of P4,000,000 for P4,100,000. The bonds mature on December 31, 2024 and pay annual interest of 16%. The bonds can be converted into 10,000 of This Company's ordinary shares with par value of P300 per share. On January 1, 2021, the bonds, without the conversion feature, were selling at a price that reflects a yield rate of 18%. On January 1, 2023, all the bonds were retired. This Company paid a call premium of P300,000 on the retirement. On retirement date, the bonds, without the conversion feature, were selling at 105. How much is the gain (loss) on the retirement of the bonds? [Put a parenthesis if your answer is a loss. Sample answer for loss: (120000))
On December 31, 2019, OLGA Inc. sold convertible bonds to Nuttin Corp. for$38,375,000. The bonds have a face value of $40,000,000, a term of 10 years and coupon payments each June 30 and December 31 at 5% per annum. The yield to maturity on similar bonds without the conversion feature is 6%. The bonds areconvertible into 10 common shares for each $1,000 bond. OLGA Inc. reports under IFRS. Prepare the journal entry that OLGA Inc. should record for the issuance of these bonds at December 31, 2019