Question
SHOW ALL CALCULATIONS AND CALCULATOR KEYSTROKES. Shields Corporation sells $5,000,000 of 8% convertible bonds on July 1, 2014 for $5,350,000. The bonds mature on July
SHOW ALL CALCULATIONS AND CALCULATOR KEYSTROKES.
Shields Corporation sells $5,000,000 of 8% convertible bonds on July 1, 2014 for $5,350,000. The bonds mature on July 1, 2029 and pay interest semi-annually on July 1 and December 31. Each $1,000 bond is convertible into 50 common shares at the investors option at maturity. The market (yield) rate is 9%.
a) Calculate the stated conversion price?
b) Prepare the journal entry at issuance using the incremental method.
c) Investors decided to convert all of their bonds at maturity on July 1, 2029 after interest is paid. Record the conversion.
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Internal Auditing A Guide For The New Auditor
Authors: David Galloway
3rd Edition
0894136917, 9780894136917
