Corporation A issues a $100,000, six-year convertible bond at 104 on January 1, 19B. This bond is convertible into 1,000 shares of $100 par common stock. Three years later, when the market value of the stock is $120, the bondholder converts the bond and receives a $500 “sweetener.” 

Prepare the entries for the original issuance and the conversion.

Answer rating: 100% (QA)

The following table shows the journal entries for the original issuance of the conve... View the full answer