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On January 1, 2023, Grouper Corporation, which follows ASPE, issued a series of 504 convertible bonds, maturing in five years. The face amount of each
On January 1, 2023, Grouper Corporation, which follows ASPE, issued a series of 504 convertible bonds, maturing in five years. The face amount of each bond was $1,000. Grouper received $530,400 for the bond issue. The bonds paid interest every December 31 at 5%; the market interest rate for bonds with a comparable level of risk was 6%. The bonds were convertible to common shares at a rate of ten common shares per bond. Grouper amortized bond premiums and discounts using the effective interest method, and the company's year-end was December 31. On January 1, 2024, 101 of the bonds were converted into common shares. On June 30, 2024, another 101 bonds were converted into common shares. The bondholders chose to forfeit the accrued interest on these bonds. On January 1,2025 , when the fair value of the bonds was $295,400 due to a der rease in market interest rates, a conversion inducement of $20/ bond was offered to the remaining bondholders to convert their bonds to common shares. All of the remaining 302 bonds were converted into common shares at that time. a. Prepare the journal entry at January 1, 2023. b. Prepare the journal entry at December 31, 2023. c. Prepare the journal entry at January 1, 2024. d. Prepare the journal entry at June 30, 2024. e. Prepare the journal entry at December 31, 2024. f. Prepare the journal entry at January 1, 2025. (Round present value factor calculations to 5 decimal places, eg. 1.25124 and the final answer to 0 decimal places e.g. 58,971. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.)
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