Ee 98. Skysong Inc. issued $3,120,000 of convertible 10-year bonds on July 1, 2020. The bonds provide for 12% interest payablesemiannually on January 1 and July 1. The discount in connection with the issue was $49,200, which is being amortized monthly on astraight-line basis.The bonds are convertible after one year into 8 shares of Skysong Inc.'s $100 par value common stock for each $1,000 of bonds.On August 1, 2021, $312,000 of bonds were turned in for conversion into common stock. Interest has been accrued monthly and paidas due. At the time of conversion, any accrued interest on bonds being converted is paid in cash.Prepare the journal entries to record the conversion, amortization, and interest in connection with the bonds as of the following dates.(Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required,select "No Entry" for the account titles and enter O for the amounts.)(a) August 1, 2021. (Assume the book value method is used.)(b)August 31, 2021.(c)December 31, 2021, including closing entries for end-of-year. No. Date Account Titles and ExplanationAug. 1,2021(a)Aug. 1,2021Aug.(b) 31,2021Aug.31,2021Dec.(c) 31,2021(To record the issuance of shares of common stock andthe write-off of the discount on bonds payable.)(To record payment in cash of interest accrued onbonds.)(To record amortization of discount on bonds.)(To record accrual of interest on bonds.)(To close expense account)Debit312.000]]]] [[Credit||||

A bondholder generally records a journal entry related to the accrued bond interest in its…

No. Date Account Titles and Explanation Aug. 1, 2021 (a) Aug. 1, 2021 Aug. (b) 31, 2021 Aug. 31. 2021 Dec. (c) 31, 2021 (To record the issuance of shares of common stock and the write-off of the discount on bonds payable.) (To record payment in cash of interest accrued on bonds.) (To record amortization of discount on bonds.) (To record accrual of interest on bonds.) (To close expense account) Debit 312,000 Credit [|]]]] [|]]

No. Date Account Titles and Explanation Aug. 1, 2021 (a) Aug. 1, 2021 Aug. (b) 31, 2021 Aug. 31. 2021 Dec. (c) 31, 2021 (To record the issuance of shares of common stock and the write-off of the discount on bonds payable.) (To record payment in cash of interest accrued on bonds.) (To record amortization of discount on bonds.) (To record accrual of interest on bonds.) (To close expense account) Debit 312,000 Credit [|]]]] [|]]

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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