For each of the unrelated transactions described below, present the entries required to record each transaction.1.2.3.Martinez Corp. issued $21,300,000par value 10% convertible bonds at 98. If the bonds had not been convertible, thecompany's investment banker estimates they would have been sold at 95.Sandhill Company issued $21,300,000par value10% bonds at97. One detachable stock purchase warrant was issued witheach $100 par value bond. At the time of issuance, the warrants were selling for $5.Suppose Sepracor, Inc. called its convertible debt in 2020. Assume the following related to the transaction. The 11%,$10,200,000par value bonds were converted into 1,020,000shares of $1 par value common stock on July 1, 2020. On July 1,there was $59,000of unamortized discount applicable to the bonds, and the company paid an additional $69.000to thebondholders to induce conversion of all the bonds. The company records the conversion using the book value method.(Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" forthe account titles and enter O for the amounts.)

A bond is a fixed-rate instrument issued to represent an advance made by a financial specialist to a…

or each of the unrelated transactions described below, present the entries required to record each transaction. 1. Martinez Corp. issued $21,300,000par value 10% convertible bonds at 98. If the bonds had not been convertible, the company's investment banker estimates they would have been sold at 95.

or each of the unrelated transactions described below, present the entries required to record each transaction. 1. Martinez Corp. issued $21,300,000par value 10% convertible bonds at 98. If the bonds had not been convertible, the company's investment banker estimates they would have been sold at 95.

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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For each of the unrelated transactions described below, present the entries required to record each transaction. 1. Sage Corp. issued $20,100,000 par value 10% convertible bonds at 98. If the bonds had not been convertible, the company’s investment banker estimates they would have been sold at 95. 2. Pronghorn Company issued $20,100,000 par value 10% bonds at 97. One detachable stock purchase warrant was issued with each $100 par value bond. At the time of issuance, the warrants were selling for $4. 3. Suppose Sepracor, Inc. called its convertible debt in 2020. Assume the following related to the transaction. The 11%, $9,100,000 par value bonds were converted into 910,000 shares of $1 par value common stock on July 1, 2020. On July 1, there was $60,000 of unamortized discount applicable to the bonds, and the company paid an additional $81,000 to the bondholders to induce conversion of all the bonds. The company records the conversion using the book value method.…
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