Collected Exercise 1

Collected Exercise 1 - Prepare the journal entry to record...

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ACC 422 Summer 2010-2011 Collected Exercise 1 Due June 28, 2011 at the beginning of class Late exercises will not be accepted 10 points 1. Simpson Corporation had two securities outstanding: $20 par common stock and a 7% convertible bond issue in the face amount of $16,000,000. The conversion clause in the bond indenture entitles the bondholders to receive 40 shares of the $20 par value common stock in exchange for each $1,000 bond. On January 1, 2010, the holders of bonds with a face value $2,400,000 exercised the conversion privilege. The market price of the bonds on that date was $1,100 per bond and the market price of the common stock was $38. The total unamortized bond discount at the date of conversion was $1,000,000.
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Unformatted text preview: Prepare the journal entry to record the conversion of the bonds. Show your computations. 2. On July 1, 2009, Keplinger Inc. issued for $104 per share, 10,000 shares of $100 par value convertible preferred stock. One share of preferred stock can be converted into 3 shares of the companys $20 par value common stock. On September 1, 2011, shareholders converted 5,000 shares of the preferred stock to common stock. The market value of the common stock at conversion was $30 per share. Prepare the journal entry to record the conversion of the preferred stock. Show your computations. 3. Briefly describe any research you have done with the FASB Accounting Standards Codification....
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Collected Exercise 1 - Prepare the journal entry to record...

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