Question
On 01-01-20, Fred issued $5,000,000 of 4%, 5- year convertible bonds. At the time of issuance, the market rate for similar bonds was 4.5%.
On 01-01-20, Fred issued $5,000,000 of 4%, 5- year convertible bonds. At the time of issuance, the market rate for similar bonds was 4.5%. The bonds were dated 01-01- 20 with interest payable January 01 and July 01. Fred incurred and paid $50,000 of bond issuance costs. On 01-01-22 after making its interest payments, 50% of the bonds were converted into 12,500 shares of Fred's $1 par value common stock. At the time of the conversion, one share of Fred's common stock was trading for $240 per share. Fred only prepares AJES every December 31. Prepare the entries Fred should make on: a. 01-01-20 b. 01-01-22
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Intermediate accounting
Authors: J. David Spiceland, James Sepe, Mark Nelson
7th edition
978-0077614041, 9780077446475, 77614046, 007744647X, 77647092, 978-0077647094
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