ttps://edugen.wileyplus.com/edugen/student/mainfr.uni S Kieso, Intermediate Acco
ID: 2549948 • Letter: T
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ttps://edugen.wileyplus.com/edugen/student/mainfr.uni S Kieso, Intermediate Accounting, 16e INTERMEDIATE ACCOUNTING (ACCT 372/373/374) NEXT Question 1 onole Company has $4040000 of 9% convertible bonds outstanding. Each $1,000 bond is convertible into 30 shares of $30 par value common stock. The bonds pay interest on January 31 and July 31. On July 31, 2018, the holders of $1200000 bonds exercised the conversion privilege. On that date the market price of the bonds was 106 and the market price of the common stock was $35. The total unamortized bond premium at the date of conversion was $282000. Oriole should record, as a result of this conversion,a D credit of $204600 to Paid-in Capital in Excess of Par. D credit of $179000 to Paid-in Capital in Excess of Par. D credit of $84600 to Premium on Bonds Payable. D loss of $12000. Click if you would like to Show Work for this question: Open Show Work By accessing this Question Assistance, you will learn while you earn points based on the Point Potential Policy set by your instructor o of useduBNIT ANSWERExplanation / Answer
Credit of $2,04,600 to paid-in capital in excess of par
(12,00,000 + (2,82,000 x 0.30) - 1200 x 30 x30)
= 12,00,000 + 84,600 - 10,80,000
= 2,04,600
(12,00,000 / 40,40,000 = 0.30)
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