On May 1, 2011, Stone Corporation issued $4 million of 10-year, 6% convertible bonds at 101. The
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On May 1, 2011, Stone Corporation issued $4 million of 10-year, 6% convertible bonds at 101. The similar bonds without the conversion rights were sold at 97. Interest is to be paid semi-annually on April 30 and October 31. Stone Corporate uses the straight-line method to amortize bond discount. On July 1, 2017, $1 million of bonds were converted into common shares. Stone Corporation uses the residual method in accounting for the issuance of convertible bonds. December 31 is the end of the accounting year (reporting date).
Prepare journal entries needed at
(1) May 1, 2011;
(2) December 31, 2012;
(3) April 30, 2014;
(4) July 1, 2017.
Related Book For
Fundamental Accounting Principles
ISBN: 978-0078110870
20th Edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
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