Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Twixt Corp, issued $5.250,000 of convertible bonds on 1 January for $5.033.000 cash. The bond had the following terms Bonds mature in five years' time

image text in transcribed
image text in transcribed
Twixt Corp, issued $5.250,000 of convertible bonds on 1 January for $5.033.000 cash. The bond had the following terms Bonds mature in five years' time Annual Interest, 6%, is paid each 31 December Bonds are convertible to 525,000 common shares at matunty or can be repaid in cash. This choice is up to Twixt Corp. Current market interest rates are 7% PV of S1. PVA of S1, and PVAD of $1. (Use appropriate factor(s) from the tables provided.) Required: 1. Assign a value to the ability and the equity portions of the bond. (Round time value factor to 5 decimal places and final answers to the nearest dollar amount.) Liability portion Equity portion 2. Provide the journal entry to record issuance of the bond. (19 no entry is required for a transaction/event, select "No Journal entry required in the first account field. Round time value factor to 5 decimal places. Round your final answers to the nearest dollar amount.) View transaction list Journal entry worksheet Record the entry for issuance of bonds. Note Enter debits before credits Transaction General Journal Credit 1 2. Provide the journal entry to record issuance of the bond. (If no entry is required for a transaction/event, select "No Journal entry required" In the first account field. Round time value factor to 5 decimal places. Round your final answers to the nearest dollar amount.) View transaction list Journal entry worksheet Record the entry for issuance of bonds. Note: Enter debits before credits Transaction General Journal Debit Credit Record entry Clear entry View general journal 3. Provide a schedule to show interest expense and amortization of the liability over the life of the bond (Round time value factor to 5 decimal places. Round your final answers to the nearest dollar amount. Leave no cell blank. Be certain to enter "o" wherever required.) Year Beginning balance Interest Liability Interest Payment Ending Interest Liability 1 2 2

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The New Yellow Book Government Auditing Standards

Authors: Rebecca A. Meyer

1st Edition

1119784638, 978-1119784630

More Books

Students also viewed these Accounting questions

Question

Explain the forces that influence how people handle conflict

Answered: 1 week ago