Give journal entry to record issuance of bond. give journal, Ask an Expert

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Q1) On January 2, 2007, Picard Enterprises issued $2,400,000 of 8%, 15 year semi-annual coupon bonds to yield 7.5%. Each bond is convertible into 40 shares of $15 par common stock that was trading at $20 per share on date of bond issue. Bonds were issued at 106. Without conversion feature, bonds would have been issued for 104.5.

1. On January 3, 2012, all bonds were converted into common stock. Market price of stock was $28 per share on date of conversion. Issue premium is amortized by using straight-line method.

2. Give journal entry to record issuance of bond.

3. Give journal entry to record the conversion of bonds assuming

Picard considers the conversion

(a) Not to be significant culminating transaction.

(b) To be significant culminating transaction.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M916814

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