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On June 30, 2011, Keystone Industries had outstanding $60 million of 8%, convertible bonds that mature on June 30, 2012. Interest is payable each year on June 30 and December 31. The bonds are convertible into 4 million shares of $10 par common stock. At June 30, 2011, the unamortized balance in the discount on bonds payable account was $4 million. On June 30, 2011, half the bonds were converted when Keystone's common stock had a market price of $40 per share. When recording the conversion using the book value method, Keystone should credit paid-in capital - excess of par.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M957261

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