Adventure Inc. issued $307,000 of 7 percent, 10-year bonds on July 1, 2019. Interest payments...
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Adventure Inc. issued $307,000 of 7 percent, 10-year bonds on July 1, 2019. Interest payments dates are January 2 and July 1. The issue price was $282,800. The bonds are convertible into common shares at the rate of 15 common shares for each $1,000 bond. The market price of Adventure Inc. common shares has risen steadily over the last two years, and on July 1, 2021, half of the bonds are converted into common shares after the interest payment entry has been recorded. Required 1. Compute the balance in the premium or discount account on the date of conversion. Adventure Inc. uses the straight-line method of amortization. 2. Prepare the entry to convert half of the bonds into common shares. Requirement 1. Compute the balance in the premium or discount account on the date of conversion. Adventure Inc. uses the straight-line method of amortization. The balance in the premium or discount account is $ The amount in this account is a Requirement 2. Prepare the entry to convert half of the bonds into common shares. (Record debits first, then credits. Exclude explanations from the journal entry.) Journal Entry Date Accounts Debit Credit Jul. 1
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