On January 1, 2018, Gless Textiles issued $21 million of 10%, 10-year convertibl

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On January 1, 2018, Gless Textiles issued $21 million of 10%, 10-year convertible bonds at 101 The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 40 shares of Gless's no par common stock. Bonds that are similar in all respects, except that they are nonconvertible, currently are selling at 99 (that is, 99% of face amount) Century Services purchased 15% of the issue as an investment 3.75 peints Required: 1. Prepare the journal entries for the issuance of the bonds by Gless and the purchase of the bond investment by Century 2. Prepare the journal entries for the June 30,2022, interest payment by both Gless and Century assuming both use the straight-line method 3. On July 1, 2023, when Gless's common stock had a market price of $33 per share, Century converted the bonds it held. Prepare the journal entries by both Gless and Century for the conversion of the bonds (book value method) 3 Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2Required Prepare the journal entries for the June 30, 2022, interest payment by both Gless and Century assuming both use the ertighe ane methiin whle tars. if no entry ia required for s transaction/evenit, setect wo journal entry required" in the first account field.) Date June 30 Geseral Journal Interest expense 10 500 Cash Cash Premum on bond invest nterest revenue 2022 Required 1

Explanation / Answer

Solution 1:

Solution 2:

Solution 3:

Journal Entries - Gless Textiles Date Particulars Debit Credit 1-Jan-18 Cash Dr ($21,000,000*101%) $21,210,000.00          To Convertible bond payable $21,000,000.00          To Premium on issue of bond $210,000.00 (To record issue of bond)

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