Question
G issued $6,000,000 of 6%, 5-year convertible bonds on 07-01-14 when the market rate for similar bonds was 5.5%. The bonds were dated 07-01-14 with
G issued $6,000,000 of 6%, 5-year convertible bonds on 07-01-14 when the market rate for similar bonds was 5.5%. The bonds were dated 07-01-14 with interest payable January 01 and July 01. G incurred and paid $5,000 of bond issuance costs. On 07-01-16aftermaking its interest payments, all of the bonds were converted into 100,000 shares of G's $0.10 par value common stock. At the time of the conversion, one share of G's common stock was trading for $75 per share. G only prepares AJEs every December 31. Prepare the entries G should make on:
(a)07-01-14
A Cash
L Discount on BP
L Bonds payable 6,000,000
(b)12-31-14
EXInterest expense
ACash
ADiscount on BP
(c)01-01-15
EXInterest expense
LInterest payable
LDiscount on BP
(d)07-01-16
L Interest payable
ACash
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