User Account

All Pages

Prepare journal entries for the issuance of the bonds

Assignment Help Accounting Basics
Reference no: EM131787824

Question - On January 1, 2010, Slug Corporation issued $6 million of 8%, 10-year convertible bonds at 102. The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 40 shares of $1 par common stock. Fuzz Company purchased 20% of the issue as an investment. On July 1, 2014, Fuzz converted all of its bonds into common stock of Slug. The market price per share for Slug was $32 at the time of the conversion. Both companies use the straight-line method for amortization.

Required:

1. Prepare journal entries for the issuance of the bonds on the issuer and the investor books.

2. Prepare the journal entries for the conversion on the books of the issuer and the investor.

Reference no: EM131787824

Questions Cloud

Compute the earnings per share immediately after stock issue : The Presley Corporation is about to go public. It currently has aftertax earnings of $7,500,000 and 2,500,000 shares are owned by the present stockholders.
Trade theories that support the concept of globalization : Define globalization and identify three of the traditional, international trade theories that support the concept of globalization.
Explain appropriate disciplinary action for employee involve : Explain the appropriate disciplinary action for the employees involve in this situation and identify motivational alternatives that can help turn the situation.
Compute the net proceeds to tyson iron works : Tyson Iron Works is about to go public. It currently has aftertax earnings of $4,500,000, and 3,000,000 shares are owned by the present stockholders.
Prepare journal entries for the issuance of the bonds : On January 1, 2010, Slug Corporation issued $6 million of 8%, 10-year convertible bonds at 102. Prepare journal entries for the issuance of the bonds on issuer
What was total cost to the firm of issuing the securities : Trajax, Inc., a high-technology firm in Portland, raised a total of $90 million in an I.P.O. What was the total cost to the firm of issuing the securities?
Audit of inventory can be difficult for number of reasons : The audit of inventory can be difficult for a number of reasons: inventory is easily moved and can be stored at multiple locations,
Compute the total dollar profit or loss on mr michaels share : Compute the total dollar profit or loss on Mr. Michaels's shares one week, one month, and one year after the purchase. In each case compute the profit or loss.
Is there evidence that the performance of the classes differ : Both classes had the same instructor and covered the same content. Is there evidence that the performances of the classes differed?

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd