Which is amortized monthly using the straight line basis

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Clarkston Inc issued $1,000,000 of convertible 10- year, 11% bonds on July 1, 2014. The interest is payable semiannually on January 1 and July 1. The discount in connection with the issue was $9,500, which is amortized monthly using the straight line basis. THe debentures are convertible after one year into five shares of the company's $1 par common stock for each $ 1,000 of bonds

On August 1, 2015, $100,000 of the bonds were converted. Interest has been accured monthly and paid as due. Any interest accured at the time of conversion of the bonds is paid in cash.

Prepare the journal entries on Clarkstons books to record the conversion, amortization, and interest on the bonds as of August 1 amd August 31, 2015

Reference no: EM13320597

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