Question: please help with understandable instructions On January 1, 2024, when its $30 par value common stock was selling for $80 per share, Windsor Corp. issued

please help with understandable instructions please help with understandable instructions On January 1, 2024, when its $30

On January 1, 2024, when its $30 par value common stock was selling for $80 per share, Windsor Corp. issued $10,800,000 of 8% convertible debentures due in 20 years. The conversion option allowed the holder of each $1,000 bond to convert the bond into five shares of the corporation's common stock. The debentures were issued for $11,664,000. The present value of the bond payments at the time of issuance was $9,180,000, and the corporation believes the difference between the present value and the amount paid is attributable to the conversion feature On January 1,2025 , the corporation's $30 par value common stock was 5plit2 for 1 , and the conversion rate for the bonds was adjusted accordingly. On January 1, 2026, when the corporation's $15 par value common stock was selling for $135 per share, holders of 30% of the convertible debentures exercised their conversion options. The corporation uses the straight-line method for amortizing arry bond discounts or premiums. (a) Prepare the journal entry to record the original issuance of the convertible debentures. (List debit entry before credit entry. Credit account tities are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter ofor the amounts) (b) Prepare the journal entry to record the exercise of the conversion option using the book value method. (List all debit entries before credit entries. Credit account titles are outomatically indented when amount is entered. Do not indent manuilly. If no entry ls required, select 'No Entry' for the account titles and enter O for the amounts

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!