Volker inc issued 2500000 of convertible 10-year bonds on

Reference no: EM13600261

Volker Inc. issued $2,500,000 of convertible 10-year bonds on July 1, 2010. The bonds provide for 12% interest payable semiannually on January 1 and July 1. The discount in connection with the issue was $54,000, which is being amortized monthly on a straight-line basis.

The bonds are convertible after one year into 8 shares of Volker Inc.'s $100 par value common stock for each $1,000 of bonds.

On August 1, 2011, $250,000 of bonds were turned in for conversion into common stock. Interest has been accrued monthly and paid as due. At the time of conversion any accrued interest on bonds being converted is paid in cash.

Instructions

Prepare the journal entries to record the conversion, amortization, and interest in connection with the bonds as of the following dates.

(a) August 1, 2011. (Assume the book value method is used.)

(b) August 31, 2011.

Reference no: EM13600261

Questions Cloud

How can a company experience a net loss but have positive : how can a company experience a net loss but have positive cash flows? please provide an example of a scenario that can

Due to erratic sales of its sole product- a disposable : due to erratic sales of its sole product- a disposable pocket camera-markline compnay has been experiencing difficulty

In a business combination what are acceptable the methods : in a business combination what are acceptable the methods of consolidation under gaap and what is acceptable under ifrs

Degelman company uses a job order cost system and applies : degelman company uses a job order cost system and applies overhead to production on the basis of direct labor costs. on

Volker inc issued 2500000 of convertible 10-year bonds on : volker inc. issued 2500000 of convertible 10-year bonds on july 1 2010. the bonds provide for 12 interest payable

A company paid a dividend of 156 per share on its stock the : a company paid a dividend of 1.56 per share on its stock. the dividends are expected to grow at a constant rate of 8

What happens to expected portfolio return if the portfolio : what happens to expected portfolio return if the portfolio beta increases from 1.0 to 1.5 the risk-free rate decreases

Explain how a gain or loss on the disposal of a long-term : explain how a gain or loss on the disposal of a long-term asset is calculated. how do gains and losses differ

On december 1 2009 withers purchased land and a building : a partial balance sheet is presented for withers industries withers industries partial balance sheet december 312008

User Account

All Pages