Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Presented below are three independent situations: (a) Blue Corporation retired $480,000 of its bonds on June 30, 2017, at 102. The carrying value of the
Presented below are three independent situations: (a) Blue Corporation retired $480,000 of its bonds on June 30, 2017, at 102. The carrying value of the bonds on the retirement date was $471, 500. The bonds pay annual interest and the interest payment due on June 30. 2017, has been made and recorded. (b) Howard. Inc. retired $300,000 of its bonds at 96 on June 30, 2017. The carrying value of the bonds on the retirement date was $295,000. The bonds pay annual interest and the interest payment due on June 30, 2017. has been made and recorded. (c) Valley Company has $80,000. 10%. 12-year convertible bonds outstanding. These bonds were sold at face value and pay annual interest on December 31 of each year. The bonds are convertible into 40 shares of Valley $4 par value common stock for each $1,000 par value bond. On December 31, 2017, after the bond interest has been paid, $30,000 par value of bonds was converted. The market value of Valley's stock was $38 per share on December 31. 2017. Instructions: For each of the independent situations, prepare the journal entry to record the retirement or conversion of the bonds
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered 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