Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. brodan corporation had two issues of securities ou

Brodan Corporation had two issues of securities outstanding common stock and an 8% convertible bond...

50.1K

Verified Solution

Question

Accounting

image

Brodan Corporation had two issues of securities outstanding common stock and an 8% convertible bond issue in the face amount of $16 000 000 Interest payment dates of the bond issue are June 30th and December 31st. The conversion clause in the bond indenture entitles the bondholders to receive forty shares of $20 par value common stock in exchange for each $1.000 bond. On June 30, 2018, the holders of $2.400.000 face value bonds exercised the conversion privilege The market price of the bonds on that date was $1,100 per bond and the market price of the common stock was $35 The total unamortized bond discount at the date of conversion was $1.000.000 in applying the book value method, what amount should Morgan credit to the account "paid-in capital in excess of par" as a result of this conversion? O a $1 440.000 O b $720.000 Oc$ 330,000 Od S 160 000

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students