Pina Inc. issued $2,400,000 of convertible 10-year bonds on July 1, 2020. The bonds provide for...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Pina Inc. issued $2,400,000 of convertible 10-year bonds on July 1, 2020. The bonds provide for 12% interest payable semiannually on January 1 and July 1. The discount in connection with the issue was $56,400, which is being amortized monthly on a straight-line basis. The bonds are convertible after one year into 8 shares of Pina Inc.'s $100 par value common stock for each $1,000 of bonds. On August 1, 2021, $240,000 of bonds were turned in for conversion into common stock. Interest has been accrued monthly and paid as due. At the time of conversion, any accrued interest on bonds being converted is paid in cash. Prepare the journal entries to record the conversion, amortization, and interest in connection with the bonds as of the following dates. (Credit account titles are automatically indented when amount is entered. Do not indent manually no entry is required, select "No Entry" for the account titles and enter o for the amounts.) (a) August 1, 2021. (Assume the book value method is used.) (b) August 31, 2021. (c) December 31, 2021, including closing entries for end-of-year. No. Date Account Titles and Explanation Debit Credit (a) Aug. 1, 2021 (To record the issuance of shares of common stock and the write-off of the discount on bonds payable.) Aug. 1, 2021 (To record payment in cash of interest accrued on bonds.) (b) Aug. 31, 2021 (To record amortization of discount on bonds.) Aug. 31, 2021 (To record accrual interest on bonds.) (c) Dec. 31, 2021 (To close expense account) Pina Inc. issued $2,400,000 of convertible 10-year bonds on July 1, 2020. The bonds provide for 12% interest payable semiannually on January 1 and July 1. The discount in connection with the issue was $56,400, which is being amortized monthly on a straight-line basis. The bonds are convertible after one year into 8 shares of Pina Inc.'s $100 par value common stock for each $1,000 of bonds. On August 1, 2021, $240,000 of bonds were turned in for conversion into common stock. Interest has been accrued monthly and paid as due. At the time of conversion, any accrued interest on bonds being converted is paid in cash. Prepare the journal entries to record the conversion, amortization, and interest in connection with the bonds as of the following dates. (Credit account titles are automatically indented when amount is entered. Do not indent manually no entry is required, select "No Entry" for the account titles and enter o for the amounts.) (a) August 1, 2021. (Assume the book value method is used.) (b) August 31, 2021. (c) December 31, 2021, including closing entries for end-of-year. No. Date Account Titles and Explanation Debit Credit (a) Aug. 1, 2021 (To record the issuance of shares of common stock and the write-off of the discount on bonds payable.) Aug. 1, 2021 (To record payment in cash of interest accrued on bonds.) (b) Aug. 31, 2021 (To record amortization of discount on bonds.) Aug. 31, 2021 (To record accrual interest on bonds.) (c) Dec. 31, 2021 (To close expense account)
Expert Answer:
Related Book For
Posted Date:
Students also viewed these accounting questions
-
Prepare the journal entries to record the following transactions for Ivanhoe Company, which has a calendar year end and uses the straight-line method of depreciation. On September 30, 2022, the...
-
Prepare the journal entries to record the following transactions on Monroe Companys books using a perpetual inventory system. (a) On March 2, Monroe Company sold $900,000 of merchandise to Churchill...
-
Prepare the journal entries to record the following transactions on Derrick Companys books using a perpetual inventory system. (a) On March 2, Derrick Company sold $900,000 of merchandise to Rose...
-
Under Public Law 480, the United States sells surplus grains to developing countries, which pay in local currencies. Since the United States rarely spends all of these currencies, much of this grain...
-
Consider the two polynomials p(s) = s2 + 7s + 10 and q(s) = s + 2. Compute the following (a) p(s)q(s) (b) Poles and zeros of G(s) = q(s) / p(s) (c) p(-1)
-
Which of the series converge absolutely, which converge, and which diverge? Give reasons for your answers. (1)". n=1 n In n - In n
-
Consider \(n\) independent random variables \(U_{1}, U_{2}, \ldots, U_{n}\), each of which obeys a Cauchy density function, \[ p_{U}(u)=\frac{1}{\pi \beta\left[1+\left(\frac{u}{\beta} ight)^{2}...
-
Buntzell Industrial Supplies distributes industrial equipment. The company's fiscal year ends on March 31, 2017. One department in the company had 50 items that cost $540 each on hand at January 1,...
-
explain the significance of partition coefficients in determining the distribution of solutes between immiscible phases, and how does this concept guide the choice of solvents in extraction processes...
-
Snowden Industries produces two electronic decoders, P and Q. Decoder P is more sophisticated and requires more programming and testing than does Decoder Q. Because of these product differences, the...
-
A student performed the experiment of determining the focal length of a concave mirror by the u-v method using an optical bench of length 1.5 m. The focal length of the mirror used is 24 cm. The...
-
Given that almost each country has its own generally accepted accounting principles, why do we need a set of internationally accepted accounting standards such as IFRS?
-
What are the possible reasons for the SEC's waiver of the U.S. GAAP reconciliation for foreign registrants that followed IFRS to prepare financial statements?
-
What does IFRS stand for? Who sets up the IFRS and are there many countries adopting IFRS? What is the advantage to adopt IFRS?
-
According to the IASB, there have been more than 100 countries or jurisdictions adopting IFRS. What is the scope of IFRS when people mention this term?
-
Briefly explain the evolutionary establishment of IASB.
-
University of South African is the biggest academic institution in Republic of South Africa and in the continent of Africa. UNISA is conducting graduation in different places in South Africa. The...
-
A spacecraft has left the earth and is moving toward Mars. An observer on the earth finds that, relative to measurements made when the spacecraft was at rest, its a. length is shorter b. KE is less...
-
On November 1, 201X, Barbie Riley opened Barbies Art Studio. The following transactions occurred in November. 201X Nov. 1 Barbie Riley invested $8,000 in the art studio. 1 Paid ten months rent in...
-
From Concept Check 6, record a journal entry for the first semiannual interest payment on October 1. In Concept Check 6, Facts: Bond issue: $200,000, 5%, 5-year bonds; selling price of bonds...
-
Indicate the normal balance and category of each of the following accounts: a. Unearned Revenue b. Merchandise Inventory (beginning of period) c. Freight-In d. Payroll Tax Expense e. Purchases...
-
(a) Show that the variancecovariance matrix of the disturbances in (9.1) is given by (9.2). (b) Show that the two nonzero block matrices in (9.2) can be written as in (9.3). (c) Show that...
-
Using the Harrison and Rubinfeld (1978) data published in Belsley, Kuh and Welsch (1980) and provided on the Springer website as Hedonic.xls, reproduce Table 9.1. Perform the Hausman test based on...
-
Using the Monte Carlo setup for the unbalanced one-way error component model considered by Baltagi and Chang (1994), compare the various estimators of the variance components and the regression...
Study smarter with the SolutionInn App