ACT_3392_Chp_16_Homework_Solutions

ACT_3392_Chp_16_Homework_Solutions - Intermediate...

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Intermediate Accounting II Amanda N. Paul, CPA, MBA Troy University
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Chapter 16 EXERCISE 16-1 1. Cash ($20,000,000 X .99) 19,800,000 Discount on Bonds Payable 200,000 Bonds Payable 20,000,000 Unamortized Bond Issue Costs 70,000 Cash 70,000 2. Cash 19,600,000 Discount on Bonds Payable 1,200,000 Bonds Payable 20,000,000 Paid-in Capital—Stock Warrants 800,000 Value of bonds plus warrants ($20,000,000 X .98) $19,600,000 Value of warrants (200,000 X $4) 800,000 Value of bonds $18,800,000
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EXERCISE 16-1 continued 3. Debt Conversion Expense 75,000 Bonds Payable 10,000,000 Discount on Bonds Payable 55,000 Common Stock 1,000,000 Paid-in Capital in Excess of Par 8,945,000* Cash 75,000 *[($10,000,000 – $55,000) – $1,000,000]
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EXERCISE 16-3 Conversion recorded at book value of the bonds: Bonds Payable 500,000 Premium on Bonds Payable 7,500 Preferred Stock (500 X 20 X $50) 500,000 Paid-in Capital in Excess of Par (Preferred Stock) 7,500
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EXERCISE 16-10 1/2/08 No entry (total compensation cost is $450,000) 12/31/08 Compensation Expense 225,000 Paid-in Capital—Stock Options 225,000 [To record compensation expense for 2008 (1/2 X $450,000)] 12/31/09 Compensation Expense 225,000 Paid-in Capital—Stock Options 225,000
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ACT_3392_Chp_16_Homework_Solutions - Intermediate...

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