ch16 - SOLUTIONS TO B EXERCISES E16-1B (1520 minutes) 1....

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
SOLUTIONS TO B EXERCISES E16-1B (15–20 minutes) 1. Cash ($50,000,000 X 1.02). ............................. 51,000,000 Bonds Payable. ........................................ 50,000,000 Premium on Bonds Payable. .................. 1,000,000 Unamortized Bond Issue Costs. .................... 750,000 Cash. ......................................................... 750,000 2. Cash. ................................................................ 35,350,000 Bonds Payable. ........................................ 35,000,000 Premium on Bonds Payable. .................. 122,500 Paid-in Capital—Stock Warrants. ........... 227,500 Value of bonds plus warrants ($35,000,000 X 1.01) $35,350,000 Value of warrants (35,000 X $6.50) 227,500 Value of bonds $35,122,500 3. Debt Conversion Expense. ............................ 355,000 Bonds Payable. ............................................... 60,000,000 Premium on Bonds Payable. ......................... 155,000 Common Stock. ........................................ 600,000 Paid-in Capital in Excess of Par. ............ 59,555,000* Cash. ......................................................... 355,000 *[($60,000,000 + $155,000) – $600,000] 16-1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
E16-2B (15–20 minutes) (a) Interest Payable ($900,000 X 4/6). .......................... 600,000 Interest Expense ($900,000 X 2/6) + $1,890. ............. 301,890 Discount on Bonds Payable. ........................... 1,890 Cash ($15,000,000 X 12% ÷ 2). ......................... 900,000 Calculations: Par value $15,000,000 Issuance price 14,550,000 Total discount $ 450,000 Months remaining 476 Discount per month $945 ($450,000 ÷ 476) Discount amortized $1,890 (2 X $945) (b) Bonds Payable. ........................................................ 7,500,000 Discount on Bonds Payable. ............................ 221,220 Common Stock (60,000 X $1). .......................... 60,000 Paid-in Capital in Excess of Par. ..................... 7,218,780* *($7,500,000 – $221,220) – $60,000 Calculations: Discount related to 1/2 of the bonds ($450,000 X 1/2) $225,000 Less: Discount amortized [($225,000 ÷ 476) X 8] 3,780 Unamortized bond discount $221,220 E16-3B (10–20 minutes) Conversion recorded at book value of the bonds: Bonds Payable. ................................................................ 5,600,000 Premium on Bonds Payable. .......................................... 150,000 Preferred Stock (5,600 X 10 X $1). ......................... 56,000 Paid-in Capital in Excess of Par (Common Stock). ................................................. 5,694,000 16-2
Background image of page 2
E16-4B (15–20 minutes) (a) Cash. .................................................................. 26,500,000 Bonds Payable. ......................................... 25,000,000 Premium on Bonds Payable. ................... 1,500,000 (b) Bonds Payable. ................................................. 10,000,000 Premium on Bonds Payable (Schedule 1). ................................................. 510,000 Common Stock, $0.50 par (Schedule 2). ......................................... 100,000
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 05/10/2010 for the course ACC 440 BSB1658 taught by Professor Warwick during the Spring '09 term at University of Phoenix.

Page1 / 24

ch16 - SOLUTIONS TO B EXERCISES E16-1B (1520 minutes) 1....

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online