Question: Please answer asap! I will thumbs up, please show work On January 1, 2025, Splish Corporation issued $1,140,000 of 15-year, 11% convertible debentures at 110.

Please answer asap! I will thumbs up, please show work

On January 1, 2025, Splish Corporation issued $1,140,000 of 15-year, 11% convertible debentures at 110. Interest is to be paid semiannually on June 30 and December 31. Each $1,000 debenture can be converted into 4 shares of Splish Corporation $5 par value common stock after December 31, 2026.

On January 1, 2027, $456,000 of the debentures is converted into common stock, which is then selling at $310. An additional $456,000 of the debentures is converted on May 31, 2027. The market price of the common stock is then $320. Accrued interest at May 31 will be paid on the next interest date.

Bond premium is amortized on a straight-line basis.

Make the necessary journal entries for:

a. December 31, 2026.

b. January 1, 2027.

c. May 31, 2027.

d. June 30, 2027.

Record the conversions using the book value method.

PLEASE USE THIS CHARTS FORMATTING FOR YOUR ANSWER. THIS IS EXACTLY WHAT IT LOOKS LIKE ON MY HOMEWORK:

Date Acct titles & explanation Debit Credit
Dec. 31,2026 Interest expense
Premium on bonds payable
Cash
Jan 1, 2027 Bonds payable
Premium on bonds payable
Common stock
Paid-in capital in excess of par - common stock
May 31, 2027 Interest expense
Premium on bonds payable
Interest payable
May 31, 2027 Bonds payable
Premium on bonds payable
Common stock
Paid-in capital in excess par
Jun. 30, 2027 Interest expense
Premium on bonds payable
Interest payable
Cash

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!