Counter corporation issued 1500000 of convertible ten year, Ask an Expert

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problem: Counter Corporation issued $1,500,000 of convertible ten year bonds on July 1, 2007. The bonds provide for 12 percent interest payable semiannually on January 1 & July 1. The discount in connection with the issue was $34,000, which is being amortized monthly on a straight line basis. The bonds are convertible after 1-year into 8 shares of Counter Corporation's $100/value common stock for each dollar 1,000 of bonds. On August 1, 2008, $150,000 of bonds was turned in for conversion into common. Interest has been accrued monthly & paid as due. At present conversion any accrued interest on bonds being converted is paid in cash. Suggestion: (LO 1) Instructions (Give your answer to nearest dollar) Make journal entries to record the conversion, amortization, & interest in connection with the bonds as of the given dates.

[A] August 1, 2008. [Suppose the book value method is used.]

[B] August 31, 2008.

[C] December 31, 2008, including closing entries for end of year.

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Category:- Accounting Basics
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