On July 1, 2014, SpaceX issued 5100 million of 5%, 10-year convertible bonds 98. The bonds pay interest on December 31 and June 30. Each $1,000 bond is convertible into 40 shares of the company's no par common stock. There was no beneficial conversion option at the time of issuance. SpaceX had similar bonds outstanding without the conversion feature that traded at 95. On July 1, 2019, five years after issuance, investors converted all of the bonds into common stock of SpaceX The market price for SpaceX common stock was $50 per share at the time of the conversion. SpaceX amortizes bond discount or premium using the straight-line method. 

Record the issuance of the bonds on July 1, 2014 

Record the conversion of the bonds on July 1, 2019. SpaceX uses the book value method to account for the conversion of the bonds.

Answer rating: 100% (QA)

Answer Date July 1 2014 July 1 2019 Journal of SpaceX Account Titles and Explanati... View the full answer