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On January 1st 2018 the Black Panther Company issued (sold) $800,000 10 year 6% bonds to yield 8% These bonds pay interest on July 1
On January 1st 2018 the Black Panther Company issued (sold) $800,000 10 year 6% bonds to yield 8% | ||||||
These bonds pay interest on July 1 and January 1 each year. | ||||||
Each of these $1000 par bonds could be converted into 20 shares of Black Panther common stock | ||||||
a) make the journal entry Black Panther makes when they issue the bonds. | ||||||
b) make the journal entry Black Panther makes when it makes the first interest payment on July 1 2018 | ||||||
c) make the adjusting journal entry Black Panther makes on December 31, 2018 | ||||||
d) make the journal entry Black Panther makes on January 1st 2019 when it makes its second interest payment | ||||||
e) On January 2nd 2019 the bondholders converted their bonds into common stock of Black Panther | ||||||
On January 2nd Black Panther's $5 par stock had a market value of $54. | ||||||
Make the Black Panther journal entry when the bonds are converted into common stock | ||||||
Instead of converting the bonds; Black Panther retired the bonds on January 2nd 2019 by paying $785,000 | ||||||
What gain or loss did Black Panther show on the retirement of the bonds? | ||||||
(make sure you tell me if it is a gain or loss) |
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