Flounder Company has bonds payable outstanding in the amount of $530,000, and th

Question

Flounder Company has bonds payable outstanding in the amount of $530,000, and the Premium on Bonds Payable account has a balance of $6,700. Each $1,000 bond is convertible into 20 shares of preferred stock of par value of $50 per share. All bonds are converted into preferred stock Assuming that the book value method was used, what entry would be made? (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.) Account Titles and Explanation Debit Credit

Explanation / Answer

Bonds payable 530000 Premium on Bonds payable 6700         Preferred stock 530000         Paid in capital in excess of par-Preferred stock 6700

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