On December 31, 2016, Zenith Corp. issues 7%, 10-year convertible bonds payable with a maturity value of
Question:
Requirements
1. Use the PV function in Excel to calculate the issue price of the bonds.
2. Using Exhibit 9-4 as a model, prepare an effective-interest method amortization table for the term of the bonds.
3. Journalize the following transactions:
a. Issuance of the bonds on December 31, 2016. Credit Convertible Bonds Payable.
b. Payment of interest and amortization of the bond discount on June 30, 2017.
c. Payment of interest and amortization of the bond discount on December 31, 2017.
d. Conversion by the bondholders on July 1, 2018, of bonds with face value of $800,000 into 70,000 shares of Zenith Corp. $ 1 -par common stock.
4. Show how Zenith Corp. would report the remaining bonds payable on its balance sheet at December 31, 2018.
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Req 1 Using the PV function in EXCEL the issue price of the bonds is 1739841 Req 2 Amortization table A B C D E Semiannual Interest Date Interest Paym...View the full answer
Answered By
Mehwish Aziz
What I have learnt in my 8 years experience of tutoring is that you really need to have a friendly relationship with your students so they can come to you with their queries without any hesitation. I am quite hardworking and I have strong work ethics. Since I had never been one of those who always top in the class and always get A* no matter what, I can understand the fear of failure and can relate with my students at so many levels. I had always been one of those who had to work really hard to get decent grades. I am forever grateful to some of the amazing teachers that I have had who made learning one, and owing to whom I was able to get some extraordinary grades and get into one of the most prestigious universities of the country. Inspired by those same teachers, I am to be like one of them - who never gives up on her students and always believe in them!
3+ Reviews
10+ Question Solved
Related Book For 
Financial Accounting
ISBN: 978-0134127620
11th edition
Authors: Walter Harrison, Charles Horngren, William Thomas, Wendy Tietz
Question Posted:
