On January 1, 20x1, an entity issues bonds with face amount of P5,000,000 for P5,200,000. The bonds mature on December 31, 20x3 and pay annual interest of 12%. The bonds can be converted into 10,000 ordinary shares of the entity with par value per share of P200. On January 1, 20x1, the bonds are selling at 101 without the conversion feature. The effective interest rate on the bonds is 11.59%. All of the bonds are converted into ordinary shares on January 1, 20x3. CONVERTIBLE BONDS - CONVERSION Use the facts in the immediately preceding problem. However, in this case, the entity retires the bonds on January 1, 20x3 at a call premium of $200,000. Without the conversion feature, the bonds are selling on this date at 102. Requirement: Provide the entry to record the retirement of the bonds.
On January 1, 20x1, an entity issues bonds with face amount of P5,000,000 for P5,200,000. The bonds mature on December 31, 20x3 and pay annual interest of 12%. The bonds can be converted into 10,000 ordinary shares of the entity with par value per share of P200. On January 1, 20x1, the bonds are selling at 101 without the conversion feature. The effective interest rate on the bonds is 11.59%. All of the bonds are converted into ordinary shares on January 1, 20x3. CONVERTIBLE BONDS - CONVERSION Use the facts in the immediately preceding problem. However, in this case, the entity retires the bonds on January 1, 20x3 at a call premium of $200,000. Without the conversion feature, the bonds are selling on this date at 102. Requirement: Provide the entry to record the retirement of the bonds.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
On January 1, 20x1, an entity issues bonds with face amount of P5,000,000 for P5,200,000. The bonds mature on December 31, 20x3 and pay annual interest of 12%. The bonds can be converted into 10,000 ordinary shares of the entity with par value per share of P200. On January 1, 20x1, the bonds are selling at 101 without the conversion feature. The effective interest rate on the bonds is 11.59%. All of the bonds are converted into ordinary shares on January 1, 20x3.
CONVERTIBLE BONDS - CONVERSION
Use the facts in the immediately preceding problem. However, in this case, the entity retires the bonds on January 1, 20x3 at a call premium of $200,000. Without the conversion feature, the bonds are selling on this date at 102.
Requirement: Provide the entry to record the retirement of the bonds.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education