1 On August 31, 2018, Chickasow Industries issued $25 million of its 30 year, 6% convertible bonds dated August 31, priced to yield 5%. The bonds are convertible at the option of the investors into 1,500,000 shares of Chickasaw's common stock, Chickasaw records interest expense at the effective rate. On August 31, 2021, investors in Chickasaw's convertible bonds tendered 20% of the bonds for conversion into common stock that had a market value of $20 per share on the date of the conversion, On January 1, 2020, Chickasaw Industries issued $40 million of its 20-year, 7% bonds dated January 1 at a price to yield 8%. On December 31, 2021, the bonds were extinguished early through acquisition in the open market by Chickasaw for $40.5 million Required: 1. Using the book value method, does the conversion of the 6% convertible bonds into common stock result in a gain, a loss, or no gain or loss? 2. Using the market value method, by how much does the conversion of the 6% convertible bonds into common stock result in a gain, a loss, or no gain or loss? 3. Were the 7% bonds issued at face value, at a discount, or at a premium? 4. In the second year of the term to maturity, will the amount of interest expense for the 7% bonds be higher than, lower than, or the same as in the first year? 5. Does the early extinguishment of the 7% bonds result in a gain, a loss, or no gain or loss? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Using the book value method, does the conversion of the 6% convertible bonds Into common stock result in a gain, a loss, or no gain or loss? Result of conversion re Required 2 > Gain Loss No gain or loss On August 31, 2018. Chickasaw Industries issued $25 million of its 30-year, 6% convertible bonds dated August 31, priced to yield 5%. The bonds are convertible at the option of the investors into 1,500,000 shares of Chickasaw's common stock. Chickasaw records Interest expense at the effective rate. On August 31, 2021, investors in Chickasaw's convertible bonds tendered 20% of the bonds for conversion into common stock that had a market value of $20 per share on the date of the conversion. On January 1, 2020, Chickasaw Industries issued $40 million of its 20-year, 7% bonds dated January 1 at a price to yield 8%. On December 31, 2021, the bonds were extingulshed early through acquisition in the open market by Chickasow for $40.5 million Required: 1. Using the book value method, does the conversion of the 6% convertible bonds into common stock result in a gain, a loss, or no gain or loss? 2. Using the market value method, by how much does the conversion of the 6% convertible bonds into common stock result in a gain, a loss, or no gain or loss? 3. Were the 7% bonds issued at face value, at a discount, or at a premium? 4. In the second year of the term to maturity, will the amount of interest expense for the 7% bonds be higher than, lower than or the same as in the first year? 5. Does the early extinguishment of the 7% bonds result in a gain, a loss, or no gain or loss? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required Using the market value method, by how much does the conversion of the 6% convertible bonds into common stock result in a gain, a loss, or no gain or loss? (Enter your answers in millions (1.0, 10,000,000 should be entered as 10).) Result of conversion million On August 31, 2018, Chickasaw Industries issued $25 million of its 30-year, 6% convertible bonds dated August 31. priced to yield 5%. The bonds are convertible at the option of the investors into 1,500,000 shares of Chickasaw's common stock Chickasaw records interest expense at the effective rate. On August 31, 2021, Investors in Chickasaw's convertible bonds tendered 20% of the bonds for conversion into common stock that had a market value of $20 per share on the date of the conversion. On January 1, 2020, Chickasaw Industries Issued $40 million of its 20-year, 7% bonds dated January 1 at a price to yield 8%. On December 31, 2021, the bonds were extinguished early through acquisition in the open market by Chickasaw for $40.5 million Required: 1. Using the book value method, does the conversion of the 6% convertible bonds into common stock result in a gain, a loss, or no gain or loss? 2. Using the market value method, by how much does the conversion of the 6% convertible bonds into common stock result in a gain, a loss, or no gain or loss? 3. Were the 7% bonds issued at face value, at a discount, or at a premium? 4. In the second year of the term to maturity, will the amount of interest expense for the 7% bonds be higher than, lower than, or the same as in the first year? 5. Does the early extinguishment of the 7% bonds result in a gain, a loss, or no gain or loss? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required Were the 7% bonds issued at face value, at a discount, or at a premium? Issued at Discount Premium Prey 1 of 1 Next Anthonys part spx-6.html Income...signment TEAM ...ompleted 2 Resume.pdf stv A --- See On August 31, 2018, Chickasaw Industries issued $25 million of its 30-year, 6% convertible bonds dated August 31, priced to yield 5%. The bonds are convertible at the option of the investors into 1,500,000 shares of Chickasaw's common stock. Chickasaw records Interest expense at the effective rate. On August 31, 2021, investors in Chickasaw's convertible bonds tendered 20% of the bonds for conversion into common stock that had a market value of $20 per share on the date of the conversion. On January 1, 2020. Chickasaw Industries issued $40 million of its 20-year, 7% bonds dated January 1 at a price to yield 8%. On December 31, 2021, the bonds were extinguished early through acquisition in the open market by Chickasaw for $40,5 million Required: 1. Using the book value method, does the conversion of the 6% convertible bonds into common stock result in a gain, a loss, or no gain or loss? 2. Using the market value method, by how much does the conversion of the 6% convertible bonds into common stock result in a gain, a loss, or no gain or loss? 3. Were the 7% bonds issued at face value, at a discount, or at a premium? 4. In the second year of the term to maturity, will the amount of interest expense for the 7% bonds be higher than, lower than, or the same as in the first year? 5. Does the early extinguishment of the 7% bonds result in a gain, a loss, or no gain or loss? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 In the second year of the term to maturity, will the amount of Interest expense for the 7% bonds be higher than, lower than, or the same as in the first year? Interest expenses Higher Lower Same On August 31, 2018, Chickasaw Industries issued $25 million of its 30-year, 6% convertible bonds dated August 31, priced to yield 5%. The bonds are convertible at the option of the investors into 1,500,000 shares of Chickasaw's common stock. Chickasaw records interest expense at the effective rate. On August 31, 2021, investors in Chickasaw's convertible bonds tendered 20% of the bonds for conversion into common stock that had a market value of $20 per share on the date of the conversion. On January 1, 2020, Chickasaw Industries issued $40 million of its 20-year, 7% bonds dated January 1 at a price to yield 8%. On December 31, 2021, the bonds were extinguished early through acquisition in the open market by Chickasaw for $40.5 million Required: 1. Using the book value method, does the conversion of the 6% convertible bonds into common stock result in a gain, a loss, or no gain or loss? 2. Using the market value method, by how much does the conversion of the 6% convertible bonds into common stock result in a gain, a loss, or no gain or loss? 3. Were the 7% bonds issued at face value, at a discount, or at a premium? 4. In the second year of the term to maturity, will the amount of interest expense for the 7% bonds be higher than, lower than, or the same as in the first year? 5. Does the early extinguishment of the 7% bonds result in a gain, a loss, or no gain or loss? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Does the early extinguishment of the 7% bonds result in a gain, a loss, or no gain or loss? Result of early extinguishment Required 5 Gain Loss No gain or loss