For each of the unrelated transactions described below, present the entries required to record each transaction. 1. Crane...

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Accounting

For each of the unrelated transactions described below, presentthe entries required to record each transaction.
1. Crane Corp. issued$21,700,000 par value 10% convertible bonds at 97. If the bonds hadnot been convertible, the company’s investment banker estimatesthey would have been sold at 95.
2. Cheyenne Company issued$21,700,000 par value 10% bonds at 96. One detachable stockpurchase warrant was issued with each $100 par value bond. At thetime of issuance, the warrants were selling for $5.
3. Suppose Sepracor,Inc. called its convertible debt in 2017. Assume thefollowing related to the transaction. The 11%, $10,200,000 parvalue bonds were converted into 1,020,000 shares of $1 par valuecommon stock on July 1, 2017. On July 1, there was $52,000 ofunamortized discount applicable to the bonds, and the company paidan additional $73,000 to the bondholders to induce conversion ofall the bonds. The company records the conversion using the bookvalue method.

(Credit account titles are automatically indented whenamount is entered. Do not indent manually. If no entry is required,select "No Entry" for the account titles and enter 0 for theamounts.)
No.
Account Titles and Explanation
Debit
Credit
1.
2.
3.

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3.6 Ratings (533 Votes)

1 In this case bonds have been issued at a discount The par value of bonds is 100 So the issuance of bonds have been journalized as Account Title Debit Credit Cash 21700000 97100 21049000 Discount on Bonds Payable 651000 See Answer

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No.	Account Titles and Explanation	Debit	Credit
1.


2.



3.

1.		Crane Corp. issued$21,700,000 par value 10% convertible bonds at 97. If the bonds hadnot been convertible, the company’s investment banker estimatesthey would have been sold at 95.
2.		Cheyenne Company issued$21,700,000 par value 10% bonds at 96. One detachable stockpurchase warrant was issued with each $100 par value bond. At thetime of issuance, the warrants were selling for $5.
3.		Suppose Sepracor,Inc. called its convertible debt in 2017. Assume thefollowing related to the transaction. The 11%, $10,200,000 parvalue bonds were converted into 1,020,000 shares of $1 par valuecommon stock on July 1, 2017. On July 1, there was $52,000 ofunamortized discount applicable to the bonds, and the company paidan additional $73,000 to the bondholders to induce conversion ofall the bonds. The company records the conversion using the bookvalue method.