Volker Inc. issued $2,500,000 of convertible 10-year bonds on July1, 2012. The bonds provide for 12% interest payable semiannually onJan 1 and July 1. The discount in connection with the issue was$54,000, which is being amortized monthly on a straight-linebasis.

The bonds are convertible after one year into 8 shares of VolkerInc.'s $100 par value common stock for each $1000 of bonds.

On August 1, 2013, $250,000 of bonds were turned in for conversioninto common stock. Interest has been accrued and paid as due. Atthe time of conversion, any accrued interest on bonds beingconverted is paid in cash.

Prepare the journal entries to record the conversion, amortization,and interest in connection with the bonds as of the followingdates. (round to the nearest dollar)

A. August 1, 2013 (assume book value method is used

B. August 31, 2013

C. December 31, 2013, including closing entries forend-of-year

The attatchment the prof gave us also has tables ot fill in.

1. Unamortized discount on bonds payable and it starts with Amountto be amortized over 120 months

2. Amortization of bond discount charged to bond interest expensein 2013 would be as follows

3. Interest on Bonds:

4.Interest for 2013 would be as follows:

5.Total interest

Answer rating: 100% (QA)

a Entries at August 1 2013 Bonds Payable250000 Discount on Bonds Payable Schedule 14815 Common Stock ... View the full answer