A221 week 6 - E 16-1 1. 9,900,000 100,000 Unamortized Bond...

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1. Cash ($10,000,000 X .99). ............................... 9,900,000 Discount on Bonds Payable. ......................... 100,000 Bonds Payable. ........................................ 10,000,000 Unamortized Bond Issue Costs. .................... 70,000 Cash. ......................................................... 70,000 2. Cash. ................................................................ 9,800,000 Discount on Bonds Payable. ......................... 600,000 Bonds Payable. ........................................ 10,000,000 Paid-in Capital—Stock Warrants. ........... 400,000 Value of bonds plus warrants ($10,000,000 X .98) $9,800,000 Value of warrants (100,000 X $4) 400,000 Value of bonds $9,400,000 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 *[($10,000,000 – $55,000) – $1,000,000] EXERCISE 16-2 (15–20 minutes) (a) Interest Payable ($150,000 X 2/6). ................. 50,000
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This note was uploaded on 07/31/2011 for the course ACCT 550 taught by Professor Log during the Spring '11 term at Abu Dhabi University.

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A221 week 6 - E 16-1 1. 9,900,000 100,000 Unamortized Bond...

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