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In: Accounting
Flint Inc. issued $3,780,000 of 11%, 10-year convertible bonds on June 1, 2017, at 98 plus...
Flint Inc. issued $3,780,000 of 11%, 10-year convertible bonds on
June 1, 2017, at 98 plus accrued interest. The bonds were dated
April 1, 2017, with interest payable April 1 and October 1. Bond
discount is amortized semiannually on a straight-line basis.
On April 1, 2018, $1,417,500 of these bonds were converted into 33,000 shares of $22 par value common stock. Accrued interest was paid in cash at the time of conversion.
On April 1, 2018, $1,417,500 of these bonds were converted into 33,000 shares of $22 par value common stock. Accrued interest was paid in cash at the time of conversion.
| (a) | Prepare the entry to record the interest expense at October 1, 2017. Assume that accrued interest payable was credited when the bonds were issued. | |
| (b) | Prepare the entry to record the
conversion on April 1, 2018. (Book value method is used.) Assume
that the entry to record amortization of the bond discount and
interest payment has been made. |
Solutions
ekkarill92 answered 2 years agoRelated Solutions
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discount is amortized semiannually on a straight-line basis.
On April 1, 2021, $1,440,000 of these bonds were converted into
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discount is amortized semiannually on a straight-line basis.
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