On January 1, 2017, Waterway Corporation issued $3,680,000 of 10-year, 8% convertible debentures at 102. Interest...

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Accounting

On January 1, 2017, Waterway Corporation issued $3,680,000 of10-year, 8% convertible debentures at 102. Interest is to be paidsemiannually on June 30 and December 31. Each $1,000 debenture canbe converted into 8 shares of Waterway Corporation $100 par valuecommon stock after December 31, 2018.

On January 1, 2019, $368,000 of debentures are converted intocommon stock, which is then selling at $110. An additional $368,000of debentures are converted on March 31, 2019. The market price ofthe common stock is then $116. Accrued interest at March 31 will bepaid on the next interest date.

Bond premium is amortized on a straight-line basis.

Make the necessary journal entries for:
(a) December 31, 2018. (c) March 31, 2019.
(b) January 1, 2019. (d) June 30, 2019.
record conversions using the book value method.

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Part A Date General journal Debit Credit December 31 2018 Bonds Interest Expense balancing figure 143520 Premium on Bonds Payable 3680000 X 2 X 120 3680 Cash 3680000 X 8 X 612 147200 Part B Date General journal Debit Credit January 1 2019 Bonds Payable 368000 See Answer

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(a)		December 31, 2018.		(c)		March 31, 2019.
(b)		January 1, 2019.		(d)		June 30, 2019.