On January 1, 2010, when its $45 par value common stock was selling for $119 per share, Bartz Corp. issued $14,900,000 of 8% convertible debentures due in 20 years. The conversion option allowed the holder of each $1,490 bond to convert the bond into five shares of the corporation's common stock. The debentures were issued for $15,794,000. The present value of the bond payments at the time of issuance was $12,665,000, and the corporation believes the difference between the present value and the amount paid is attributable to the conversion feature. On January 1, 2011, the corporation's $45 par value common stock was split 2 for 1, and the conversion rate for the bonds was adjusted accordingly. On January 1, 2012, when the corporation's $22 par value common stock was selling for $201 per share, holders of 20% of the convertible debentures exercised their conversion options. The corporation uses the straight-line method for amortizing any bond discounts or premiums. (List multiple debit/credit entries from largest to smallest amount, e.g. 10, 5, 2.)
This question was asked on Oct 31, 2011 and answered on Nov 02, 2011.
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