On July 1, 2008,bondholders convertedbonds of Vebbz Corporation with a face value of $90,000 into 1,800 of its no par value common shares On that date, these shares were being traded at $51 and there was a balance of $3,600 of discount on the bonds remaining unamortized All interest has been recorded and paid up to that date When the bonds had been issued, the equity portion of the issue was recorded at $850 The balance of this unamortized discount amounted to 40 of the discount recorded on the date the bonds had been issued Interest is paid on June 30 and December 31 and the bond discount is being amortized at $675 per interest period For Section III only , assume Vebbz is using ASPE The journal entry that Vebbz would be required to make to record this conversion transaction would include qUESTION 1 a Common Stock CR$87,250 b Common Stock CR$81,000 Gain on Conversion of Bonds CR$4,550 c Common Stock CR$81,000 Contributed Surplus Conversion CR$4,550 d Common Stock CR$81,000 Gain on Conversion of Bonds CR$9,850 e None of the above qUESTION 2 Determine the date on which the bonds were issued a January 1, 2008 b July 1, 2004 c January 1, 2000 d January 1, 2004 e Cannot be determined from the given data qUESTION 3 The journal entry that Vebbz was required to be made when these convertible bonds were issued a Cash DR$90,850 Bonds Payable CR$90,000 Contributed Surplus Conversion CR$850 b Cash DR$87,250 Bonds Payable CR$86,400 Contributed Surplus Conversion CR$850 c Cash DR$81,850 Bonds Payable CR$81,000 Contributed Surplus Conversion CR$850 d Cash DR$90,850 Bonds Payable CR$90,850 e Cash DR$81,850 Bonds Payable CR$81,850 qUESTION 4 On December 31, 2018, Vebbz owed a total of $4,000,000 on a number of notes payable which were coming due on various dates between February 14 and March 15, 2019 On January 21, 2019, Vebbz borrowed a 5 year long term loan of $2,400,000 from The Krypton National Bank It used the funds from this loan along with$1,000,000 of its cash reserves, to repay $3,400,000 of the short term notes owed The financial statements were issued on March 5, 2019 in accordance with ASPE What is the amount which Vebbz should report as current liabilities on the balance sheet dated December 31, 2018 a $2,400,000 b $1,000,000 c $600,000 d $4,000,000 e $1,600,000

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On July 1, 2008,bondholders convertedbonds of Vebbz Corporation with a face value of $90,000 into 1,800 of its no par value common shares.On that date,

On July 1, 2008,bondholders convertedbonds ofVebbz Corporationwith a face value of $90,000 into 1,800 of its no par value common shares.On that date, these shares were being traded at $51 and there was a balance of $3,600 of discount on the bonds remaining unamortized. All interest has been recorded and paid up to that date.When the bonds had been issued, the equity portion of the issue was recorded at $850.

The balance of this unamortized discount amounted to 40% of the discount recorded on the date the bonds had been issued.Interest is paid on June 30 and December 31 and the bond discount is being amortized at $675 per interest period.

ForSection IIIonly, assume Vebbz is usingASPE.

The journal entry that Vebbz would be required to make to record this conversion transaction would include

qUESTION 1

Common Stock...CR$87,250

Common Stock...CR$81,000;Gain on Conversion of Bonds...CR$4,550

Common Stock...CR$81,000;Contributed Surplus - Conversion...CR$4,550

Common Stock...CR$81,000;Gain on Conversion of Bonds...CR$9,850

None of the above.

qUESTION 2

Determine the date on which the bonds were issued.

January 1, 2008

July 1, 2004

January 1, 2000

January 1, 2004

Cannot be determined from the given data.

qUESTION 3

The journal entry that Vebbz was required to be made when these convertible bonds were issued.

Cash...DR$90,850;Bonds Payable...CR$90,000;Contributed Surplus - Conversion...CR$850

Cash...DR$87,250;Bonds Payable...CR$86,400;Contributed Surplus - Conversion...CR$850

Cash...DR$81,850;Bonds Payable...CR$81,000;Contributed Surplus - Conversion...CR$850

Cash...DR$90,850;Bonds Payable...CR$90,850

Cash...DR$81,850;Bonds Payable...CR$81,850

qUESTION 4

On December 31, 2018, Vebbz owed a total of $4,000,000 on a number of notes payable which were coming due on various dates between February 14 and March 15, 2019.On January 21, 2019, Vebbz borrowed a 5-year long-term loan of $2,400,000 from The Krypton National Bank.It used the funds from this loan along with$1,000,000 of its cash reserves, to repay $3,400,000 of the short-term notes owed. The financial statements were issued on March 5, 2019 in accordance with ASPE.What is the amount which Vebbz should report as current liabilities on the balance sheet dated December 31, 2018 ?

$2,400,000

$1,000,000

$600,000

$4,000,000

$1,600,000