Question
On January 1, 2015, Slug Corporation issued $6.1 million of 10%, 10-year convertible bonds at 102. The bonds pay interest on June 30 and December
On January 1, 2015, Slug Corporation issued $6.1 million of 10%, 10-year convertible bonds at 102. The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 50 shares of $1 par common stock. Fuzz Company purchased 30% of the issue as an investment. On July 1, 2019, Fuzz converted all of its bonds into common stock of Slug. The market price per share for Slug was $33 at the time of the conversion. Both companies use the straight-line method for amortization.
A. Record the ISSUER-Issuance.
B. Record the ISSUER-Conversion of semiannual periods later.
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