On April 1, 2020, Waterway Company sold  17,100 of its  12%,  15-year, $1,000 face value bonds at  97. Interest payment dates are April 1 and October 1, and the company uses the straight-line method of bond discount amortization. On March 1, 2021, Waterway took advantage of favorable prices of its stock to extinguish  4,500 of the bonds by issuing  148,500 shares of its $10 par value common stock. At this time, the accrued interest was paid in cash. The company’s stock was selling for $ 30 per share on March 1, 2021. Prepare the journal entries needed on the books of Waterway Company to record the following. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answers to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a)   April 1, 2020: issuance of the bonds. (b)   October 1, 2020: payment of semiannual interest. (c)   December 31, 2020: accrual of interest expense. (d)   March 1, 2021: extinguishment of  4,500 bonds. (No reversing entries made.) No. Date Account Titles and Explanation Debit Credit (a) 4/1/20                           (b) 10/1/20                           (c) 12/31/20                           (d) 3/1/21                                         (To record interest and discount on bonds retired)       3/1/21                                                   (To record extinguishment of the bonds)

In 2019, Crane Ltd. issued $48,000 of 9% bonds at par, with each $1,000 bond being convertible into 100 common shares. The company had revenues of $77,300 and expenses of $40,200 for 2020, not including interest and taxes (assume a tax rate of 20%). Throughout 2020, 1,400 common shares were outstanding, and none of the bonds were converted or redeemed. (For simplicity, assume that the convertible bonds’ equity element is not recorded.)   Calculate diluted earnings per share for the year ended December 31, 2020. (Round answer to 2 decimal places, e.g. 15.25.) Diluted earnings per share

On September 1, 2025, Splish Company sold at 104 (plus accrued interest) 5,760 of its 9%, 10-year, $1,000 face value, nonconvertible bonds with detachable stock warrants. Each bond carried two detachable warrants. Each warrant was for one share of common stock at a specified option price of $14 per share. Shortly after issuance, the warrants were quoted on the market for $3 each. No fair value can be determined for the Splish Company bonds. Interest is payable on December 1 and June 1. Prepare in general journal format the entry to record the issuance of the bonds. (List all debit entries before credit entries. 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.) Date September 1, 2025 Account Titles and Explanation Cash Bonds Payable Premium on Bonds Payable Paid-in Capital-Stock Warrants Interest Payable Debit 6120000 Credit 5760000 207360 23040…

On August 1, 2024, Perez Communications issued $36 million of 12% nonconvertible bonds at 105. The bonds are due on July 31, 2044. Each $1,000 bond was issued with 25 detachable stock warrants, each of which entitled the bondholder to purchase, for $50, one share of Perez Communications’ no par common stock. Interstate Containers purchased 20% of the bond issue. On August 1, 2024, the market value of the common stock was $48 per share and the market value of each warrant was $8. In February 2035, when Perez common stock had a market price of $62 per share and the unamortized discount balance was $2 million, Interstate Containers exercised the warrants it held. Questions: Prepare the journal entries on August 1, 2024, to record (a) the issuance of the bonds by Perez and (b) the investment by Interstate. Prepare the journal entries for both Perez and Interstate in February 2035, to record the exercise of the warrants.

On December 1, 2021, Bramble Corp.issued 680 of its 8%, $1,000 bonds at 104. Attached to each bond was one detachable stock warrant entitling the holder to purchase 1 share of Bramble's common stock. On December 1, 2021, the market value of the bonds, without the stock warrants, was 97, and the market value of each stock purchase warrant was $50. The amount of the proceeds from the issuance that should be accounted for as the initial carrying value of the bonds payable would be $700,400 O $680,000 $672,533 $665,380

On April 1, 2023, Sheridan Corp. sold 11,000 of its $900 face value, 15-year, 10% bonds at 98. Interest payment dates are April 1 and October 1. The company follows ASPE and uses the straight-line method of bond discount amortization. On March 1, 2024, Sheridan extinguished 2,750 of the bonds by issuing 80,000 shares. At this time, the accrued interest was paid in cash to the bondholders whose bonds were being extinguished. In a separate transaction on March 1, 2024, 120, 000 of the company's shares sold for $32 per share .a.Prepare Sheridan's journal entry to record the issuance of the bonds on April 1, 2023 DR.cash 9702000 Cr.bonds payable 9702000 b.Prepare Sheridan's journal entry to record the payment of the semi-annual interest on October 1, 2023. Dr. interest expense5016000 Cr.cash 495000 Cr.bonds payable 6600 c.Prepare Sheridan's journal entry to record the accrual of the interest expense on December 31, 2023. Dr. interest expense 250800 Cr,interest payable 247500 Cr.bonds…

Bundle Company issues 1,000,000 par value 10 year bonds at 102 on January 1, 2018, which Mega Corporation purchased. The coupon rate on the bonds is 9%. Interest payment are made semiannually in July 1 and January 1. On July 1, 2021, Parent Company purchased 500,000 par value of the bonds from Mega Corporation for 492,200. Bundle Company owns 65% of A Company's voting shares. During 2021, Bundle Company recorded an interest income on yhe aforementioned bonds payable of 23,100, while A Company recorded an interest expese of 44,000, in ehich 22,000 was incurred from July 1 to December 31.   B Company has a comprehensive income of 500,000 while A Company has 150,000. No other intercompany transaction occurred during 2021. Assume straight-line amortization.   Compute for the gain on extinguishment of bonds to be recognized in the 2021 consolidated statement of comprehensive income. Compute the comprehensive income assigned to the controlling interest for 2021. Compute the comprehensive…

On January 1, 2020, Sarasota Company issued 10-year, $1,810,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 15 shares of Sarasota common stock. Sarasota's net income in 2020 was $403,200, and its tax rate was 20%. The company had 96,000 shares of common stock outstanding throughout 2020. None of the bonds were converted in 2020. (a) Compute diluted earnings per share for 2020. (Round answer to 2 decimal places, e.g. $2.55.) Diluted earnings per share $ (b) Compute diluted earnings per share for 2020, assuming the same facts as above, except that $960,000 of 6% convertible preferred stock was issued instead of the bonds. Each $100 preferred share is convertible into 5 shares of Sarasota common stock. (Round answer to 2 decimal places, e.g. $2.55.) Diluted earnings per share $