see attached question

On January 1, 2016, when its $30par value common stock was selling for $80per share, Crane Corp. issued $12,300,000of 8% convertible debentures due in 20 years. The conversion option allowed the holder of each $1,000bond to convert the bond into five shares of the corporation's common stock. The debentures were issued for $13,284,000. The present value of the bond payments at the time of issuance was $10,455,000, and the corporation believes the difference between the present value and the amount paid is attributable to the conversion feature. On January 1, 2017, the corporation's $30par value common stock was split 2 for 1, and the conversion rate for the bonds was adjusted accordingly. On January 1, 2018, when the corporation's $15par value common stock was selling for $135per share, holders of 30% of the convertible debentures exercised their conversion options. The corporation uses the straight-line method for amortizing any bond discounts or premiums.

(a)Prepare the entry to record the original issuance of the convertible debentures.

(b)Prepare the entry to record the exercise of the conversion option, using the book value method.

Exercise 16-4 /Your answer is partially correct. Try again. On January 1, 2016, when its $30 par value common stock was selling for $80 per share, Crane Corp. issued $12,300,000 of 8% convertible debentures due in 20 years. The conversion option allowed the holder of each $1,000 bond to convert the bond into five shares of the corporation's common stock. The debentures were issued for $13,284,000. The present value of the bond payments at the time of issuance was $10,455,000, and the corporation believes the difference between the present value and the amount paid is attributable to the conversion feature. On January 1, 2017, the corporation's $30 par value common stock was split 2 for 1, and the conversion rate for the bonds was adjusted accordingly. On January 1, 2018, when the corporation's $15 par value common stock was selling for $135 per share, holders of 30% of the convertible debentures exercised their conversion options. The corporation uses the straight-line method for amortizing any bond discounts or premiums. (a) Prepare the entry to record the original issuance of the convertible debentures. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit |Cash 13,284,000 Premium on Bonds Payable 920000 Bonds Payable 11500000 (b) Prepare the entry to record the exercise of the conversion option, using the book value method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit Bonds Payable 345000 Premium on Bonds Payable 248400 Common Stock 517500 Paid-in Capital in Excess of Par - Common Stock 3180900 Click if you would like to Show Work for this question: Open Show Work SHOW LIST OF ACCOUNTS LINK TO TEXT Question Attempts: 1 of 3 used