On January 1, 2006 the Taylor Corporation purchased $20,000 of the Kalanda Corporations 12% convertible bonds for

Question:

On January 1, 2006 the Taylor Corporation purchased $20,000 of the Kalanda Corporation’s 12% convertible bonds for $19,760. The bonds pay interest semiannually each December 31 and June 30 and are due December 31, 2010. Each $1,000 bond is convertible into 15 shares of the Kalanda Corporation’s $10 par common stock. Taylor uses the straight-line method of discount amortization. At the end of 2006 and 2007, the quoted market price of the bonds was not materially different from the amortized cost. On July 1, 2008 Taylor exchanged all of the bonds for Kalanda common stock. At that time the market value of the common stock was $72 per share.

Required

Prepare whatever entries are necessary to record the acquisition and conversion of the Kalanda bonds.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...