Question
This is a conversion question that I need help on. Common stock value is $30- issued for for $30 million for 10 years. $1,000 bonds
This is a conversion question that I need help on.
Common stock value is $30- issued for for $30 million for 10 years. $1,000 bonds equal 6 shares of Common Stock and the debentures bonds issued $11 million. Present value of the bond payment is $8.5 million. The difference between the present value and the amount paid for bonds was the conversion feature. On 1/2016 bonds split 3-1 . on 1/2017 $10 par CS was selling for $90 per share. 40% of the conversions debentures exercised their options. the straight-line method is used to calculate the premium or discount on the bonds. Show calculations and journal entries. for the issuance and book value method.
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