"2-19-2010 - EXERCISE 16-4 (a) Cash

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Unformatted text preview: EXERCISE 16-4 (a) Cash .............................................................................................. 10,600,000 Bonds Payable...................................................................... 10,000,000 Premium on Bonds Payable................................................. 600,000 (To record issuance of $10,000,000 of 8% convertible debentures for $10,600,000. 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........................................................................ 2,000,000 Premium on Bonds Payable (Schedule 1) ...................................................................... 108,000 Common Stock, $15 par (Schedule 2) ............................................................ 300,000 Paid-in Capital in Excess of Par................................... 1,808,000 (To record conversion of 20% 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, 2010............................................ ........................................................................................................$600,000 Amortization for 2010 ($600,000 20)........................................................ $30,000 Amortization for 2011 ($600,000 20)........................................................ 30,000 60,000 Premium on bonds payable on January 1, 2012............................................Premium on bonds payable on January 1, 2012....
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This note was uploaded on 04/09/2011 for the course MGMT 351 taught by Professor Staff during the Winter '08 term at Purdue University-West Lafayette.

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"2-19-2010 - EXERCISE 16-4 (a) Cash

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