On May Dj Vu Company issued bonds that have a total face value of
$each bond has a face value of $ The bonds sold for $ and
mature in years. The effective interest rate for the bonds was on Interest
is paid semiannually on October and April Each bond can be converted into
shares of Dj Vu Company's $ par value common stock. The market value per share of
Dj Vu's common stock was $ on and $ on The market rate of
interest on the bonds fell to on
a Fill in all of the blanks in the amortization table.
b What is the change in total liabilities resulting from the joumal entry to
record interest expense? Provide a dollar amount and circle increase or decrease.
Increase
Decrease
c What would the increase in Dj Vu Company's common stock and paidin capital
accounts be if half of the bonds were converted into common stock on November
Common Stock $
Paidin Capital &
