Question
Please answer asap! I will thumbs up, please show work On January 1, 2025, Splish Corporation issued $1,140,000 of 15-year, 11% convertible debentures at 110.
Please answer asap! I will thumbs up, please show work
On January 1, 2025, Splish Corporation issued $1,140,000 of 15-year, 11% convertible debentures at 110. Interest is to be paid semiannually on June 30 and December 31. Each $1,000 debenture can be converted into 4 shares of Splish Corporation $5 par value common stock after December 31, 2026.
On January 1, 2027, $456,000 of the debentures is converted into common stock, which is then selling at $310. An additional $456,000 of the debentures is converted on May 31, 2027. The market price of the common stock is then $320. Accrued interest at May 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. May 31, 2027.
d. June 30, 2027.
Record the conversions using the book value method.
PLEASE USE THIS CHARTS FORMATTING FOR YOUR ANSWER. THIS IS EXACTLY WHAT IT LOOKS LIKE ON MY HOMEWORK:
Date | Acct titles & explanation | Debit | Credit |
Dec. 31,2026 | Interest expense | ||
Premium on bonds payable | |||
Cash | |||
Jan 1, 2027 | Bonds payable | ||
Premium on bonds payable | |||
Common stock | |||
Paid-in capital in excess of par - common stock | |||
May 31, 2027 | Interest expense | ||
Premium on bonds payable | |||
Interest payable | |||
May 31, 2027 | Bonds payable | ||
Premium on bonds payable | |||
Common stock | |||
Paid-in capital in excess par | |||
Jun. 30, 2027 | Interest expense | ||
Premium on bonds payable | |||
Interest payable | |||
Cash |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started