Question: On January 1, 2017, Riverbed Corporation issued $4,020,000 of 10-year, 8% convertible debentures at 102. Interest is to be paid semiannually on June 30 and December 31. Each $1,000 debenture can be converted into 8 shares of Riverbed Corporation $100 par value common stock after December 31, 2018.
On January 1, 2019, $402,000 of debentures are converted into common stock, which is then selling at $110. An additional $402,000 of debentures are converted on March 31, 2019. The market price of the common stock is then $114. Accrued interest at March 31 will be paid on the next interest date.
Bond premium is amortized on a straight-line basis.
Make the necessary journal entries for:
| (a) |
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December 31, 2018. |
|
(c) |
|
March 31, 2019. |
| (b) |
|
January 1, 2019. |
|
(d) |
|
June 30, 2019. |
Record the conversions using the book value method.