er S1, 201 E15-8 Presented below and on page 678 are three independent situation
ID: 2561433 • Letter: E
Question
er S1, 201 E15-8 Presented below and on page 678 are three independent situations. Longbine Corporation redeemed $130,000 face value, 12% bonds on June 30, 2017, at Prepare entries for redemp of bonds and conversion 102. The carrying value of the bonds at the redemption date was $117,500. The bonds bonds into commo sto annual interest, and the interest payment due on June 30, 2017, has been made and L0 2) recorded. 2. Tastove Inc. redeemed $150,000 face value, 12.5% bonds on June 30, 2017, at 98, The carrying value of the bonds at the redemption date was $151,000. The bonds pay annual interest, and the interest payment due on June 30, 2017, has been made and recorded. 3. Precision Company has $80,000, 8%, 12-year convertible bonds outstanding. These bonds were sold at face value and pay annual interest on December 31 of each year. The bonds are convertible into 30 shares of Precision $5 par value common stock for eachExplanation / Answer
Date
Accounts title and Explanations
Debit ($)
Credit ($)
1
30-Jun
Bonds Payable
130,000
Loss on Bonds Redemption
15,100
Cash ($130,000 * 102%)
132,600
Bonds Discount ($130,000 - $117,500)
12,500
2
30-Jun
Bonds Payable
150,000
Premium on Bonds ($151,000 - $150,000)
1,000
Cash ($150,000 * 98%)
147,000
Gain on Bonds redemption
4,000
3
Dec. 31
Bonds payable
20,000
loss on coversion of bonds
6,400
Paid-in capital in excess of par value-common stock(20000/1000)*30*(44-5)
23,400
Common stock (20000/1000)*30*5
3000
Date
Accounts title and Explanations
Debit ($)
Credit ($)
1
30-Jun
Bonds Payable
130,000
Loss on Bonds Redemption
15,100
Cash ($130,000 * 102%)
132,600
Bonds Discount ($130,000 - $117,500)
12,500
2
30-Jun
Bonds Payable
150,000
Premium on Bonds ($151,000 - $150,000)
1,000
Cash ($150,000 * 98%)
147,000
Gain on Bonds redemption
4,000
3
Dec. 31
Bonds payable
20,000
loss on coversion of bonds
6,400
Paid-in capital in excess of par value-common stock(20000/1000)*30*(44-5)
23,400
Common stock (20000/1000)*30*5
3000
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