On January 1, Year 6, Darth Corp. issued $50,000 of five-year $1,000 bonds payable at 104. These bonds were each convertible into 100 shares of $10 par common stock. On January 1, Year 9, Darth converted all of these bonds when the stock was selling at $11.50 a share.

Required:

 

Complete the matrix to indicate the amounts that would be recorded for the indicated accounts in the journal entry to record the bond conversion. Then record the journal entries for the bond conversion under the book value method and under the market value method.

Answer rating: 100% (QA)

Bond Conversion Journal Entries A Completing the Account Matrix Account Book Value Method Market Value Method Bonds Payable 50000 50000 Premium on Bon... View the full answer