Chapter 16 solutions to exercises and problems

Chapter 16 solutions to exercises and problems - EXERCISE...

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Unformatted text preview: 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 CapitalStock 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 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 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 EXERCISE 16-4 (a) Cash .............................................................................................. 10,800,000 Bonds Payable.................................................................... 10,000,000 Premium on Bonds Payable.............................................. 800,000 (To record issuance of $10,000,000 of 8% convertible debentures for $10,800,000. The bonds mature in twenty years, and each $1,000 bond is convertible into five shares of $30 par value common stock) (b) Bonds Payable...................................................................... 3,000,000 Premium on Bonds Payable (Schedule 1) ...................................................................... 216,000 Common Stock, $15 par (Schedule 2) ............................................................ 450,000 Paid-in Capital in Excess of Par............................... 2,766,000 (To record conversion of 30% of the outstanding 8% convertible debentures after giving effect to the 2-for-1 stock split) Schedule 1 Computation of Unamortized Premium on Bonds Converted Premium on bonds payable on January 1, 2006...
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This note was uploaded on 10/07/2010 for the course ACC 5115 taught by Professor Mitra during the Spring '10 term at Wayne State University.

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Chapter 16 solutions to exercises and problems - EXERCISE...

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