1. On Dec 31 2017, ABC Co. has outstanding $500,000 face amount, 9%, 20-year convertible bonds that...

Question:

1. On Dec 31 2017, ABC Co. has outstanding $500,000 face amount, 9%, 20-year convertible bonds that pay interest semiannually. After semiannual amortization on Dec. 31, 2017, the remaining bond premium is $8,000. On the first day of the next fiscal year (January 1, 2018), 50% (half) of the bonds are converted to 750 shares of $50 common stock. The market value of the shares issued is $250,000. Prepare the necessary journal entry to record the conversion of the bonds.
2. On January 1, 2016 Vera Co. had 100,000 shares of $5 par outstanding. The following transactions took place during 2016. Vera declared and issued a 20% stock on March 15. On July 1, Vera purchased 10,000 shares of its common stock. On October 1, Vera issued 14,000 shares for cash.
a) What is the total number of shares outstanding as of Dec. 31?
b) What is the weighted-average number of shares outstanding as of Dec. 31?
c) On Dec 31 2016 Vera Co had a Net Income of $350,000 and declared preferred dividends of $85,000. Calculate the Earnings Per share for 2016
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...