Question
For each of the unrelated transactions described below, present the entries required to record each transaction. 1. Swifty Corp. issued $20,100,000 par value 10% convertible
For each of the unrelated transactions described below, present the entries required to record each transaction.
1. | Swifty Corp. issued $20,100,000 par value 10% convertible bonds at 98. If the bonds had not been convertible, the companys investment banker estimates they would have been sold at 95. | |
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2. | Nash Company issued $20,100,000 par value 10% bonds at 97. One detachable stock purchase warrant was issued with each $100 par value bond. At the time of issuance, the warrants were selling for $4. | |
3. | Suppose Sepracor, Inc. called its convertible debt in 2020. Assume the following related to the transaction. The 11%, $9,100,000 par value bonds were converted into 910,000 shares of $1 par value common stock on July 1, 2020. On July 1, there was $60,000 of unamortized discount applicable to the bonds, and the company paid an additional $81,000 to the bondholders to induce conversion of all the bonds. The company records the conversion using the book value method. |
(Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
No. | Account Titles and Explanation | Debit | Credit |
---|---|---|---|
1. | enter an account title for the first transaction | enter a debit amount | enter a credit amount |
enter an account title for the first transaction | enter a debit amount | enter a credit amount | |
enter an account title for the first transaction | enter a debit amount | enter a credit amount | |
2. | enter an account title for the second transaction | enter a debit amount | enter a credit amount |
enter an account title for the second transaction | enter a debit amount | enter a credit amount | |
enter an account title for the second transaction | enter a debit amount | enter a credit amount | |
enter an account title for the second transaction | enter a debit amount | enter a credit amount | |
3. | enter an account title for the third transaction | enter a debit amount | enter a credit amount |
enter an account title for the third transaction | enter a debit amount | enter a credit amount | |
enter an account title for the third transaction | enter a debit amount | enter a credit amount | |
enter an account title for the third transaction | enter a debit amount | enter a credit amount | |
enter an account title for the third transaction | enter a debit amount | enter a credit amount | |
enter an account title for the third transaction | enter a debit amount | enter a credit amount |
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