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Item 4
Item 4 1.6 points
On January 1, 2021, Gless Textiles issued $10 million of 7%, 20-year convertible bonds at 101. The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 40 shares of Glesss no par common stock. Bonds that are similar in all respects, except that they are nonconvertible, currently are selling at 99 (that is, 99% of face amount). Century Services purchased 15% of the issue as an investment. Required: 1. Prepare the journal entries for the issuance of the bonds by Gless and the purchase of the bond investment by Century. 2. Prepare the journal entries for the June 30, 2025, interest payment by both Gless and Century assuming both use the straight-line method.
3. On July 1, 2026, when Glesss common stock had a market price of $33 per share, Century converted the bonds it held. Prepare the journal entries by both Gless and Century for the conversion of the bonds (book value method).
On January 1, 2021, Gless Textiles issued $10 million of 7%, 20-year convertible bonds at 101. The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 40 shares of less's no par common stock. Bonds that are similar in all respects, except that they are nonconvertible, currently are selling at 99 (that is, 99% of face amount). Century Services purchased 15% of the issue as an investment. Required: 1. Prepare the journal entries for the issuance of the bonds by Gless and the purchase of the bond investment by Century. 2. Prepare the journal entries for the June 30, 2025, interest payment by both Gless and Century assuming both use the straight-line method. 3. On July 1, 2026, when Gless's common stock had a market price of $33 per share, Century converted the bonds it held. Prepare the journal entries by both Gless and Century for the conversion of the bonds (book value method). Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare the journal entries for the issuance of the bonds by Gless and the purchase of the bond investment by Century. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.) View transaction list Journal entry worksheet Record the issuance of the bonds by Gless. Note: Enter debits before credits. Date General Journal Debit Credit January 01, 2021 Journal entry worksheet Record the purchase of the bond investment by Century. Note: Enter debits before credits. Date General Journal Debit Credit January 01, 2021 mplete this question by in the tabs below Required 1 Required 2 Required 3 Prepare the journal entries for the June 30, 2025, interest payment by both Gless and Century assuming both use the straight-line method. (If no entry is required for a transaction/event, select "No journal entry required in the first account field. Enter your answers whole dollars.) View transaction list Journal entry worksheet Record the interest payment by Gless. Note: Enter debits before credits. Date General Journal Debit Credit Journal entry worksheet 1 2 > Record the receipt of interest by Century. Note: Enter debits before credits. Date General Journal Debit Credit Prev 4 of 5 journal entries by both Gless and Century for the conversion of the bonds (book value method). Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 On July 1, 2026, when Gless's common stock had a market price of $33 per share, Century converted the bonds it held. Prepare the journal entries by both Gless and Century for the conversion of the bonds (book value method). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.) View transaction list Journal entry worksheet
