On January 1, 2019, Branson Corporation issued $500,000 of convertible bonds at par value. The bonds were

Question:

On January 1, 2019, Branson Corporation issued $500,000 of convertible bonds at par value. The bonds were issued with a stated interest rate of 3%. Each $1,000 bond is convertible into 20 shares of the corporation’s $1 par value common stock. Branson may also elect to settle bonds with a cash payment in lieu of issuing stock. Similar bonds without the conversion feature would have sold for $455,000. Prepare the journal entry for Branson to record the issuance of the convertible bonds.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... 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,...

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