1. On February 1, 2018, Ellison Co. issued eight-year bonds with a face value of $10,000,000 and...
Question:
1. On February 1, 2018, Ellison Co. issued eight-year bonds with a face value of $10,000,000 and a stated interest rate of 9%, payable semiannually on July 1 and January 1. The bonds were sold to yield 10%. The bonds are callable at 101 and convertible.
- The issue price of the bonds is
- Record the journal entries for February 2018 at issuance and July 1.
2. Using the information above, assume that the bonds issued by Ellison Co. are convertible with each $1,000 convertible into 25 shares of common stock. Assume that Ellison converts $5,000,000 of bonds on July 1, 2020 into common stock. Prepare the following entries:
a. Entry at February 1, 2018 for issuance of the convertible bonds
b. Entry at July 1, 2020 for the conversion of $5,000,000 of bonds.
3. Using the information above, assume that the remaining bonds are called on December 31, 2020
Principles Of Accounting Volume 1 Financial Accounting
ISBN: 9781593995942
1st Edition
Authors: Mitchell Franklin, Patty Graybeal, Dixon Cooper, OpenStax