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Cancellation of Convertible Bonds before the end Assume that the same $1,000,000 bond from Empresas...

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Accounting

Cancellation of Convertible Bonds before the end

Assume that the same $1,000,000 bond from Empresas Buenapaga is convertible to 50,000 common stock value par $10. When the premium has an outstanding unretretized balance sheet of $75,000 bondholders decide to exercise the option to convert the bonds.

Required: Make the journal entry to record the conversion of the bond into common shares.

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