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On January 1, 2016, Skysong issued 10-year, $200,000 face value, 6% bonds at par. Each $1,000 bond is convertible into 30 shares of Skysong $2 par...
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On January 1, 2016, Skysong issued 10-year, $200,000 face value, 6% bonds at par. Each $1,000 bond is convertible

into 30 shares of Skysong $2 par value common stock. The company has had 10,000 shares of common stock (and no preferred stock) outstanding throughout its life. None of the bonds have been converted as of the end of 2017. (Ignore all tax effects.)

Prepare the journal entry Skysong would have made on January 1, 2016, to record the issuance of the bonds. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)


Date

Account Titles and Explanation

Debit

Credit

Jan. 31, 2016



Skysong's net income in 2017 was $26,000 and was $22,000 in 2016. Compute basic and diluted earnings per share for Skysong for 2017 and 2016. (Round answers to 2 decimal places, e.g. 52.75.)

2016 2017

Basic earning per share


Diluted earning per share


Assume that 75% of the holders of Skysong's convertible bonds convert their bonds to stock on June 30, 2018, when Skysong's stock is trading at $32 per share. Skysong pays $50 per bond to induce bondholders to convert. Prepare the journal entry to record the conversion. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)


Jun. 30, 2018

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