Face Value
Stated Interest Rate Per Year/Period
Term
Interest Periods per Year
Interest Payment Dates
Total Interest Payment Periods
Market Rate of Interest
Selling Price
Varification of Selling Price:
PV of Principal:
PV of Interest Payments
Total
$
$
50
Number of bonds: $500,000/$1000 = 500 Bonds
Conversion Rate: 20 shares of preferred stock for each bond
No. of shares: 20 x 500 = 10,000 shares
Carrying Value of Bonds:
$ 507,500
Par Value of Stock: $50 x 10,000 shares
Add'l PIC in Excess of Par:
Total
$
*BRIEF EXERCISE 15-15
(a)
Preferred stockholders would receive $60,000 (6% X $1,000,000)
and the remainder of $240,000 ($300,000 $60,000) would be
distributed to common stockholders.
(b)
Preferred stockholders would receive $180,000 (6% X $1,000,000
X 3)
PROBLEM 15-1
(a)
January 11
Cash (20,000 X $16). 320,000
Common Stock (20,000 X $10) .
200,000
Paid-in Capital in Excess of ParCommon
Stock.
120,000
February 1
Equipment. 50,000
Buildings. 160,000
Land. 270,000
Preferred Stock (4,000 X $100).
400,000
Paid
Part 1:
Face Value of Note (includes future interest)
FMV of Land
Term
Interest
Borrowing rate for Ellen Greene Co.
Non-Interest-Bearing Note
Need to find Present Value of the Note
Conceptual basis:
(1) When exchanging note for other than cash,
record not
Face Value
Stated Interest Rate Per Year/Period
Term
Interest Periods per Year
Interest Payment Dates
Total Interest Payment Periods
Market Rate of Interest
Selling Price
Varification of Selling Price:
PV of Principal:
PV of Interest Payments
Total
$
$
$
EXERCISE 13-1 (1015 minutes)
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(l)
(m)
(n)
(o)
(p)
Current liability.
Current liability.
Current liability or long-term liability depending on term of warranty.
Current liability.
Current liability.
Current liabil