Wang Inc. has $3,000,000 (par value), 8% convertible bonds outstanding. Each $1,000 bond is convertible into...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Wang Inc. has $3,000,000 (par value), 8% convertible bonds outstanding. Each $1,000 bond is convertible into thirty no par value common shares. The bonds pay interest on January 31 and July 31. On July 31, 2020, the holders of $900,000 worth of bonds exercised the conversion privilege. On that date the market price of the bonds was 105, the market price of the common shares was $36, the carrying value of the common shares was $18 and the Contributed Surplus-Conversion Rights account balance was $450,000. The total unamortized bond premium at the date of conversion was $210,000. Using the book value method, Wang should record, as a result of this conversion, no gain or loss. a gain of $18,000. a loss of $9,000. other comprehensive income of $9,000. Wang Inc. has $3,000,000 (par value), 8% convertible bonds outstanding. Each $1,000 bond is convertible into thirty no par value common shares. The bonds pay interest on January 31 and July 31. On July 31, 2020, the holders of $900,000 worth of bonds exercised the conversion privilege. On that date the market price of the bonds was 105, the market price of the common shares was $36, the carrying value of the common shares was $18 and the Contributed Surplus-Conversion Rights account balance was $450,000. The total unamortized bond premium at the date of conversion was $210,000. Using the book value method, Wang should record, as a result of this conversion, no gain or loss. a gain of $18,000. a loss of $9,000. other comprehensive income of $9,000.
Expert Answer:
Related Book For
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
Posted Date:
Students also viewed these accounting questions
-
A $1000 par value convertible bond has a conversion price of $50. It is currently selling for $1120 despite the fact that the bond's coupon rate and the market rate are equal. The common stock...
-
A $1000 par value convertible bond has a conversion price of $50. It is currently selling for $1,120 despite the fact that the bonds coupon rate and the market rate are equal. The common stock...
-
Question 3 Find the equation of the plane containing the point P(0, 2, 5) and the line r(t) =(2, 1, 5) + t(2, -3, -2). [Hint: First find two vectors parallel to the plane (that is, find two vectors...
-
Read and watch the video case Using Operations to Create Value at Crayola and answer the following questions. a) Identify Crayolas competitive priorities from the list in Table 1.3 of the textbook...
-
Suppose that a company issues the following bonds at different times. Interest on the bonds is paid annually. 1. $80,000 of 6%, 10-year bonds when the market rate of interest is 7% 2. $60,000 of 8%,...
-
A physical therapist claims that one 600-milligram dose of Vitamin C will increase muscular endurance. The table shows the numbers of repetitions 15 males made on a hand dynamometer (measures grip...
-
Saturated steam at \(356 \mathrm{~K}\) condenses on a vertical tube of diameter \(5 \mathrm{~cm}\) whose surface is maintained at \(340 \mathrm{~K}\). Find the height at which the flow becomes wavy....
-
Chimnesia has two equally sized groups of people: smokers and nonsmokers. Both types of people have utility U = ln(C), where C is the amount of consumption that people have in any period. So long as...
-
315 g of a solution has a volume of 4.2 L. 5 L of this solution sells for $9.29. At these rates, what mass of the solution can we buy with $120? a. (1/10 marks) List the unknown quantity name,...
-
Reconsider the Fly-Right Airplane Co. problem introduced in Prob. 12.3-7. A more detailed analysis of the various cost and revenue factors now has revealed that the potential profit from producing...
-
C Corp sales were $8,500,000 in 2016. Accounts receivable were $450,000 at the beginning of the year and $675,000 at the end of the year. What amount did C-Corp collect of its credit sales in 2016?
-
Review the assumptions from the previous problem, and assume that it still costs 6 to produce a pack of cigarettes. a. Draw the private supply curve and the private demand curve in this market. What...
-
Assuming that a tea plantation has market power in the market for tea workers, explain how it could use that power in setting the wage rate. Draw a graph to illustrate your answer. Sri Lankas workers...
-
An employee from that organization notified us about the change in date for the event. Revise the following sentences to improve clarity and precision. Use your imagination to add appropriate words.
-
The following data have been reported for the constant-pressure heat capacity of a benzenecarbon tetrachloride mixture at 20C. On a single graph plot the constant-pressure partial molar heat capacity...
-
To smooth out swings in the business cycle, the government influences the economy through its fiscal and monetary policies. Discuss the monetary and fiscal policies that have been applied in response...
-
Cultural competence is most important at the administrative level of an organization. Question 8 options: True False
-
Explain how two samples can have the same mean but different standard deviations. Draw a bar graph that shows the two samples, their means an standard deviations as error bars. T S
-
Nonmonetary Exchange Alatorre Corporation, which manufactures shoes, hired a recent college graduate to work in its accounting department. On the first day of work, the accountant was assigned to...
-
Derrick plc issues 4,000 restricted shares to its CFO, Dane Yaping, on January 1, 2019. The shares have a fair value of 120,000 on this date. The service period related to these restricted shares is...
-
Lewis Machinery Works entered into a lease agreement on January 1, 2019, to provide Garcia SA with a piece of machinery. The terms of the lease agreement were as follows. 1. The lease is to be for 3...
-
What are a manager's resources?
-
What are the three levels of management?
-
What is the glass ceiling?
Study smarter with the SolutionInn App