On 01-01-20, Fred issued $5,000,000 of 4%, 5- year convertible bonds. At the time of issuance,...
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On 01-01-20, Fred issued $5,000,000 of 4%, 5- year convertible bonds. At the time of issuance, the market rate for similar bonds was 4.5%. The bonds were dated 01-01- 20 with interest payable January 01 and July 01. Fred incurred and paid $50,000 of bond issuance costs. On 01-01-22 after making its interest payments, 50% of the bonds were converted into 12,500 shares of Fred's $1 par value common stock. At the time of the conversion, one share of Fred's common stock was trading for $240 per share. Fred only prepares AJES every December 31. Prepare the entries Fred should make on: a. 01-01-20 b. 01-01-22 On 01-01-20, Fred issued $5,000,000 of 4%, 5- year convertible bonds. At the time of issuance, the market rate for similar bonds was 4.5%. The bonds were dated 01-01- 20 with interest payable January 01 and July 01. Fred incurred and paid $50,000 of bond issuance costs. On 01-01-22 after making its interest payments, 50% of the bonds were converted into 12,500 shares of Fred's $1 par value common stock. At the time of the conversion, one share of Fred's common stock was trading for $240 per share. Fred only prepares AJES every December 31. Prepare the entries Fred should make on: a. 01-01-20 b. 01-01-22
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a On 010120 Fred issued 5000000 of 4 5year convertible bonds The market rate for similar bonds was 4... View the full answer
Related Book For
Intermediate accounting
ISBN: 978-0077647094
7th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
Posted Date:
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