Tim Howard Gloves issued 6.25% bonds with a face amount of $30 million, together with 16 million shares of its $1 par common stock, for a combined cash amount of $56 million. The fair value of Howard's stock cannot be determined. The bonds would have sold for $24 million if issued separately. For this transaction, Howard should record paid-in capital—excess of par in the amount of:
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- On July 1, 2020, 2-SO Company issued 10% bonds with a maturity value of P5,000,000 together with 50,000 shares with P50 par value Ordinary share for a combined cash amount of P12,000,000. The market value of 2-SO’s Ordinary share cannot be ascertained. If the bonds were issued separately, they would have sold for P5,500,000. Your audit disclosed that 2-SO recorded bonds payable with premium and no premium for ordinary shares that was issued. What amount of audit adjustment to correct the share premium on ordinary share on the issuance? Answer in figures, ignore peso sign.At the beginning of the current year, Cove Company, a closely-held entity, issued 6% bonds with a maturity value of P6,000,000, together with 10,000 ordinary shares of P50 par value, for a combined car amount of P11,000,000. If issued separately, the bonds would have sold for P4,000,000 an 8% yield to maturity basis. 1. What amount of the proceeds should be allocated to the ordinary shares? Please show solutionFor each of the unrelated transactions described below, present the entries required to record each transaction. 1. Pronghorn Corp. issued $21,600,000 par value 11% convertible bonds at 97. If the bonds had not been convertible, the company’s investment banker estimates they would have been sold at 95. 2. Stellar Company issued $21,600,000 par value 11% bonds at 96. 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 12%, $10,900,000 par value bonds were converted into 1,090,000 shares of $1 par value common stock on July 1, 2020. On July 1, there was $55,000 of unamortized discount applicable to the bonds, and the company paid an additional $78,000 to the bondholders to induce conversion of all the bonds. The company records the conversion using the book value method.
- For each of the unrelated transactions described below, present the entries required to record each transaction. 1. Ayayai Corp. issued $ 18,600,000 par value 11% convertible bonds at 99. If the bonds had not been convertible, the company’s investment banker estimates they would have been sold at 95. 2. Pina Company issued $ 18,600,000 par value 11% bonds at 98. One detachable stock purchase warrant was issued with each $100 par value bond. At the time of issuance, the warrants were selling for $ 5. 3. Suppose Sepracor, Inc. called its convertible debt in 2020. Assume the following related to the transaction. The 12%, $ 9,300,000 par value bonds were converted into 930,000 shares of $1 par value common stock on July 1, 2020. On July 1, there was $ 51,000 of unamortized discount applicable to the bonds, and the company paid an additional $ 78,000 to the bondholders to induce conversion of all the bonds. The company records the conversion using the book value method.…Crane Limited had $2.39 million of bonds payable outstanding and the unamortized premium for these bonds amounted to $44,600. Each $1,000 bond was convertible into 20 preferred shares. All bonds were then converted into preferred shares. The Contributed Surplus - Conversion Rights account had a balance of $21,500. Assume that the company follows IFRS. a. Assuming that the book value method was used, what entry would be made? Account Titles and Explanation Debit Credit b. Assume that Crane Ltd. offers $9,000 to induce early conversion. What journal entry would be made? Account Titles and Explanation Debit CreditThe following investment-related transactions were completed by the company during 2021: Purchased P3,000,000.00 of ABC Corporation 7% bonds, paying 102.5 plus accrued interest of P52,500.00. In addition, the company paid brokerage fee of P15,000.00. The company classified these bonds as a trading security. • Purchased 30,000 shares of XYZ Corporation ordinary shares at P125 per share plus brokerage fees of P28,500. The company classified this stock as available for sale. Received semi-annual interest on the ABC Corporation bonds. Sold 4,500 shares of XYZ Corporation at P132 per share. Sold P480,000 of ABC Corporation 7% bonds at 102, plus accrued interest of P2,790.00. Determine the current portion of the investments.
- Sunland Corporation earned net income of $340,000 in 2023 and had 100,000 common shares outstanding throughout the year. Also outstanding all year was $800,000 of 10% bonds that are convertible into 10,000 common shares. Sunland's tax rate is 30%. Calculate Sunland's 2023 diluted earnings per share. For simplicity, ignore the IFR$ requirement to record the debt and equity components of the bonds separately. (Round answer to 2 decimal places, e.g. 15.25.) Diluted earnings per share $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.…For each of the unrelated transactions described below, present the entries required to record each transaction. 1. 2. 3. Sheffield Corp. issued $20,400,000 par value 9% convertible bonds at 98. If the bonds had not been convertible, the company's investment banker estimates they would have been sold at 95. Tamarisk Company issued $20,400,000 par value 9% 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. Suppose Sepracor, Inc. called its convertible debt in 2025. Assume the following related to the transaction. The 10%, $9,900,000 par value bonds were converted into 990,000 shares of $1 par value common stock on July 1, 2025. On July 1, there was $51,000 of unamortized discount applicable to the bonds, and the company paid an additional $68,000 to the bondholders to induce conversion of all the bonds. The company records the conversion using the book value method. (List all debit…
- For each of the unrelated transactions described below, present the entries required to record each transaction. 1. 2. 3. Vaughn Corp. issued $21,600,000 par value 11% convertible bonds at 97. If the bonds had not been convertible, the company's investment banker estimates they would have been sold at 95. Bramble Company issued $21,600,000 par value 11% bonds at 96. One detachable stock purchase warrant was issued with each $100 par value bond. At the time of issuance, the warrants were selling for $4. 1. Suppose Sepracor, Inc. called its convertible debt in 2025. Assume the following related to the transaction. The 12%, $10,900,000 par value bonds were converted into 1,090,000 shares of $1 par value common stock on July 1, 2025. On July 1, there was $55,000 of unamortized discount applicable to the bonds, and the company paid an additional $78,000 to the bondholders to induce conversion of all the bonds. The company records the conversion using the book value method. (List all debit…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, the company'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 with each $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 the bondholders to induce conversion of all the bonds. The company records the conversion using the book value method. (Credit account titles…The securities owned by Micaflores Company were held as a long-term investment. During the current vear, the following transactions occurred: Jan. 1 Purchased 15,000 shares of ABC Company at P70 per share. May1 Purchased 8,000 shares of DEF Corporation for P660,000. Apr 1 Received a cash dividend of P6 per share from ABC Company. July 1 Received a share for a share dividend from DEF Corporation. Aug 1 Purchased 10,000 shares of GHI Enterprises at P75 each. Oct 1 Received a cash dividend of P6 per share from ABC Company. Oct 31 DEF Corporation offered shareholders rights to subscribe to one new share for every ten rights tendered at P25. At the time of issuance, the market value of the right is P4. Share rights are not accounted for separately. Nov 15 Exercised the DEF Corporation's share rights. Dec. 1 Sold 10,000 shares of DEF Corporation at P35 per share. Use the FIFO approach in determining the cost of the shares sold. Dec. 31 The fair values of the portfolio is as follows: ABC…