Bond premium is amortized on a straight-line basis

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Reference no: EM13794749

On January 1, 2014, Gottlieb Corporation issued $3,730,000 of 10-year, 9% convertible debentures at 103. Interest is to be paid semi annually on June 30 and December 31. Each $1,000 debenture can be converted into 8 shares of Gottlieb Corporation $102 par value common stock after December 31, 2015.

On January 1, 2016, $373,000 of debentures are converted into common stock, which is then selling at $112. An additional $373,000 of debentures are converted on March 31, 2016. The market price of the common stock is then $117. Accrued interest at March 31 will be paid on the next interest date.

Bond premium is amortized on a straight-line basis.

Make the necessary journal entries for:

a) December 31, 2015

b) January 1, 2016

c) March 31, 2016

d) June 30, 2016

Reference no: EM13794749

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