Question

On January 1 2016, when its S 30 par value common stock was selling for S80 per share, Tamanuk Corp. .sund $10,600.000 d S% cowettle deberues d n 20-as ne conween orer alceed the leder of each 51,00 bond to convert the bond inte five shares of the corporation’s common stock. The debentures were issaed for $11,418,000. The sresert value of the bond payments at the time of ssuance was $9,010 oco, and the corporater beleves the dfference between the present value and the amourt pors attr tabe to the convers on feature on rury 1 2 1 7 he eneration s 30 ernme tock was sple 2 for 1, and the conversion ate for the brds was adi sted according y On Jan 1 2018 when the corporation’s SS par veln cemrenstock-as sellng for sus per s we, hedersof 30% of the convertible debentures exercised their conversion eptiors. The corporation uses the straight ine method for amortizing any bond discounts or premams (a) Prepare the entry to record the orignal issuance of the convertble debentuaes. (Credit account tes are automaticalily indented whem anouint is entered, Do not indent manually. If mo entry is required, select “No Entry for tee account titles and enter O for the anmounts) Account Titles and Explanation Credit o the book value methed. (Credlit account titles are automatically indented when aoumt is entered. Do not indent manoally. tf no entry is requiredl, select “No Entry for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credt

 



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