Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. exercise 16-1 for each of the unrelated transactio

Exercise 16-1 For each of the unrelated transactions described below, present the entries required to...

90.2K

Verified Solution

Question

Finance

Exercise 16-1

For each of the unrelated transactions described below, present the entries required to record each transaction.

1. Grand Corp. issued $20,151,000 par value 11% convertible bonds at 96. If the bonds had not been convertible, the companys investment banker estimates they would have been sold at 95. Expenses of issuing the bonds were $72,500.
2. Hoosier Company issued $20,151,000 par value 11% bonds at 95. One detachable stock warrant was issued with each $100 par value bond. At the time of issuance, the warrants were selling for $4.
3. Suppose Sepracor, Inc. called its convertible debt in 2014. Assume the following related to the transaction: The 12%, $10,039,000 par value bonds were converted into 1,003,900 shares of $1 par value common stock on July 1, 2014. On July 1, there was $62,100 of unamortized discount applicable to the bonds, and the company paid an additional $85,100 to the bondholders to induce conversion of all the bonds. The company records the conversion using the book value method.

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