Record the conversions using the book value method

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Question - On January 1, 2020, Monty corporation issued $3,800,000 of 10-year, 8% convertible debentures at 104. Interest is to be paid semiannually on June 30 and December 31. Each $1,000 debenture can be converted into 8 shares of Monty Corporation $100 par value common stock after December 31, 2021.

On January 1, 2022, $380,000 of debentures are converted into common stock, which is then selling at $100. An additional $380,000 of debentures are converted on March 31, 2022. The market price of the common stock is then $115. 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. December 31, 2021 B. January1, 2022 C. March 31, 2022. D. June 30, 2022.

Record the conversions using the book value method?

Reference no: EM132427948

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