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On December 31, 2010, the book value of the bonds, inclusive of the unamortized premium, was $2.1 million.
On July 3, 2011, when the bonds had an unamortized discount of $7,400, and the market value of the McGraw shares was $52 per share.
Prepare the journal entry to record the exercise of the conversion option, using the book value method.
All the bonds were converted on July 1, 2011, when the market price of the common stock was $50 per share.
Determine the value to be assigned to the bonds and the warrants, and prepare the journal entry to record the issuance of the convertible bonds.
The company sold the bonds for $3 million. The value of the warrants at the time of issuance was $200,000.
On January 1, 2010, the Johnson Corporation issued a two-year note due December 31, 2011, with a face value of $10,000.
Chatham gave Pitt a $60,000 non-interest-bearing note payable in five equal annual installments of $12,000, with the first payment due and paid.
Prepare the journal entries on Spath Company's books for 2010 and 2011.
Prepare the journal entries to record the issuance of the note, retirement, and any interest expense on the books of Webb .
On January 1, 2010, the Sanders Corporation purchased equipment having a fair value of $68,301.30 by issuing a non-interest-bearing, $100,000.
On January 1, 2010, the Billips Corporation purchased equipment having a fair value of $72,054.94 by issuing a $90,000 note, payable in three $30,000.
Neither the fair value of the machinery nor the note was determinable at the time of sale; however, Brown's incremental borrowing rate was 12%.
Prepare the journal entries on Tabor Company's books to record the annual interest revenue and receipt of each $20,000 installment.
Prepare the journal entries from 2010 to 2018 for the bank to record the above loan impairment events.
Prepare the journal entries to record the issuance of the bonds, all the interest payments, premium amortizations, bond issue cost amortizations.
Compute the effective yield rate on each issuance of the Watson Corporation 11% bonds.
Assume the company retired the bonds on September 30, 2011 for $630,000, which includes accrued interest.
Prepare a bond interest expense and premium amortization schedule using the straight-line method.
Assume the company reacquired the bonds on July 1, 2011 at 104. Prepare journal entries to record the bond retirement.
Prepare a bond interest expense and discount amortization schedule using the effective interest method.
If the company were required to reflect the current yield each year, explain how it would account for the bonds.
If the company were required under GAAP to assign a value to the conversion feature, explain how the valuation would be determined.
Prepare the journal entries on March 31, 2010 to record the exchange of the warrants for common shares.
The machinery has a fair value of $11,348.54, is subject to straight-line depreciation, and has an estimated life of 10 years .