Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please answer asap!! I will thumbs up if correct! Please show your work. Also, all the ones in the table that I put (not correct),

please answer asap!! I will thumbs up if correct! Please show your work. Also, all the ones in the table that I put (not correct), there is no option for bond interest payable or whatever is on other chegg answers.

On January 1, 2025, Swifty Corporation issued $3,860,000 of 10-year, 8% convertible debentures at 104. Interest is to be paid semiannually on June 30 and December 31. Each $1,000 debenture can be converted into 8 shares of Swifty Corporation $102 par value common stock after December 31, 2026.

On January 1, 2027, $386,000 of debentures are converted into common stock, which is then selling at $113. An additional $386,000 of debentures are converted on March 31, 2027. The market price of the common stock is then $119. Accrued interest at March 31 will be paid on the next interest date.

Bond premium is amortized on a straight-line basis.

Make the necessary journal entries for:

a. December 31, 2026.

b. January 1, 2027..

c. March 31, 2027.

d. June 30, 2027.

Record the conversions using the book value method.

No. Date Acct titles Debit Credit
a. Dec. 31 2026 Bond interest expense (not correct)
Premium on bonds payable
Cash
b. Jan. 1 2027 Bonds payable
Premiums on bonds payable
Common stock
Paid-in capital in excess of par - common stock
c. Mar. 31, 2027 Bond interest expense (not correct)
Premium on bonds payable
Bond interest expense (not correct)
Mar. 31, 2027 Bonds payable
Premium on bonds payable
Common stock
Paid-in capital in excess of par - common stock
d. Jun. 30, 2027 Bond interest expense (not correct)
Premium on bonds payable
Bond interest expense (not correct)
Cash

Thank you!!

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions

Question

Explain the sources of recruitment.

Answered: 1 week ago

Question

Differentiate sin(5x+2)

Answered: 1 week ago

Question

Compute the derivative f(x)=1/ax+bx

Answered: 1 week ago

Question

What is job enlargement ?

Answered: 1 week ago