Exercise 16-1 For each of the unrelated transactions described below, present th
ID: 2509065 • Letter: E
Question
Exercise 16-1 For each of the unrelated transactions described below, present the entries required to record each transaction 1. Vaughn Corp. issued $21,300,000 par value 9% convertible bonds at 97, If the bonds had not been convertible, the company's investment banker estimates they would have been sold at 95 2. Bramble Company issued $21,300,000 par value 9% bonds at 96. One detachable stock purchase warrant was issued with each $100 par value bond. At the time of issuance, the warrants were selling for $5. 3. Suppose Sepracor, Inc. called its convertible debt in 2017, Assume the following related to the transaction. The 10%, $10,400,000 par value bonds were converted into 1,040,000 shares of $1 par value common stock on July 1, 2017 On July 1, there was $52,000 of unamortized discount applicable to the bonds, and the company paid an additional $80,000 to the bondholders to induce conversion of all the bonds. The company records the conversion using the book value method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) No. Account Titles and Explanation Debit Credit 1. 2. 3.Explanation / Answer
Answer:-
Particular
Debit
Credit
Cash
$20,661,000
Discount on Bond Payable
$639,000
Bond Payable
$21,300,000
2.
Cash
$20,448,000
Discount on Bond Payable
$1,917,000
Bond Payable
$21,300,000
Additional paid in capital-Stock Warrant
$1,065,000
3.
Bond Payable
$10,400,000
Debt Conversion Expense
$80,000
Discount on Bond Payable
$52,000
Common Stock
$1,040,000
APIC-Common Stock
$9,308,000
Cash
$80,000
Particular
Debit
Credit
Cash
$20,661,000
Discount on Bond Payable
$639,000
Bond Payable
$21,300,000
2.
Cash
$20,448,000
Discount on Bond Payable
$1,917,000
Bond Payable
$21,300,000
Additional paid in capital-Stock Warrant
$1,065,000
3.
Bond Payable
$10,400,000
Debt Conversion Expense
$80,000
Discount on Bond Payable
$52,000
Common Stock
$1,040,000
APIC-Common Stock
$9,308,000
Cash
$80,000
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.