Exercise 16-1 No. Account Titles and Explanation Debit Credit 1. 2. 3. Warning D

Question

Exercise 16-1

No.

Account Titles and Explanation

Debit

Credit

1.

2.

3.

Warning

Don't show me this message again for the assignment

Ok  Cancel  

Open Show Work

Modify Show Work

Save for later

Submit Answer

Warning

Your instructor has reset your attempts for this question. The question will reload in the original state.

Click “Continue” to proceed with the question.

<div>< img height="1" width="1" alt="" src="//googleads.g.doubleclick.net/pagead/viewthroughconversion/944609404/?value=0&guid=ON&script=0"/>< /div>

Exercise 16-1

For each of the unrelated transactions described below, present the entries required to record each transaction.
1. Windsor 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. Sheridan 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.

Warning

Don't show me this message again for the assignment

Ok  Cancel  

Click if you would like to Show Work for this question:

Open Show Work

Modify Show Work

Question Attempts: 0 of 5 used

Save for later

Submit Answer

Explanation / Answer

Journal

No. Account Name Debit Credit 1. Cash 20661000 Discount on bonds payable 639000 Bonds payable 21300000 2. Cash 20448000 Discount on bonds payable 1917000 Bonds payable 21300000 Additional paid in capital-Stock Warrant 1065000 3. Bonds payable 10400000 Debt conversion expense 80000 Discount on bonds payable 52000 Common stock 1040000 Additional paid in capital-Common stock 9308000 Cash 80000

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.