User Account

All Pages

How many shares were issued at the time of conversion

Assignment Help Financial Accounting
Reference no: EM133147028

Question - On January 1, 2020, Lakes Limited, a private company which follows ASPE standards, issued 8-year, $300,000 face value, 6% bonds at par (interest pay able annually on January 1). Each $1,000 bond is convertible into 30 Lakes common shares. None of the bonds have been converted as of the end of 2021. The present value of the bond without a conversion option is $273, 159 at the time of issuance and the difference is allocated to the conversion feature.

On January 1, 2022, 100% of the holders of Lakes's convertible bonds converted their bonds to shares, when Lakes's shares were trading at $58 per share. The Bond's fair value at the time of conversion was $279,969. Lakes offers an additional premium of $300 to bondholders to convert the bond.

Required -

a. Prepare the journal entry Lakes would have made on January 1, 2020, to record the issuance of the bonds.

b. Prepare the journal entries to record the conversion (Show your work for marks).

c. How many shares were issued at the time of conversion?

Reference no: EM133147028

Questions Cloud

Analyze pyramids in egypt in terms : Analyze the pyramids in Egypt in terms of what is "religious" about them.
Determine the bending moment diagram : Determine the bending moment diagram of the frame and Drawing bending moment diagrams
What amount should be reported as the pretax cumulative : In the statement of retained earnings for 2022, what amount should be reported as the pretax cumulative effect of this accounting change
Global environments throughout history : How has the production of food impacted local and global environments throughout history.
How many shares were issued at the time of conversion : The Bond's fair value at the time of conversion was $279,969. How many shares were issued at the time of conversion
State how much each class of shares should receive : The preferred shares carry a dividend of $6 per share and have a $100 stated value. State how much each class of shares should receive
Calculate the accounts receivable turnover ratio : Logan Sales provides the following information: Net credit sales: $790,000. Calculate the accounts receivable turnover ratio
The Global Cold War : What event, concept, or historical process remained unclear to you? Why? How do you evaluate your learning process about world history so far?
Determine the weighted average number of shares outstanding : On January 1, 2021, Mortar Corp. had 580,000 common shares outstanding. Determine the weighted average number of shares outstanding

Reviews

Write a Review

Financial Accounting Questions & Answers

  Explanation from financial reporting-ethical perspectives

You are a recently-hired accountant at Greenwood Company, a small corporation that does a seasonal business of selling snow removal equipment, with most of its sales to retailers occurring in the last two quarters of the calendar year. Respond to the..

  Multiple-step income statement format

Rank the three companies (highest to lowest) based on the gross margin ratio and which of the companies uses a multiple-step income statement format?

  Determine mr ramsey maximum charitable donations tax credit

During 2019, these shares are given to a registered Canadian charity. Determine Mr. Ramsey's maximum charitable donations tax credit in 2019

  What is the return on assets and return on equity

Assume that a company has a profit margin of 6.0 percent, a debt ratio of 3.2 times, and a debt ratio of 50 percent, what is the return on assets and return on equity?

  Goodwill is reported on a consolidated balance sheet only

goodwill is reported on a consolidated balance sheet only if it was acquired in the merger or acquisition.nbspnbsp

  What is the firm federal income tax

Andrews Corporation has income from operations of $239,000. Using the 2013 corporate tax schedule, what is the firm's federal income tax

  Determine whether the project should be undertaken

The firm is an ongoing profitable business and pays taxes at a 30% rate in the year of income. It uses a 15% discount rate on the new project. Using the NPV approach, determine whether the project should be undertaken (use the relevant tax rate in..

  What is cost of goods sold for metlock

Ending inventory consists of 27 units from each of the three purchases and 9 units from the November 1 inventory, cost of goods sold is?

  Would you plan a test of controls or substantive tests

What would you include in the audit plan, and why, would you plan a test of controls or substantive tests? Why or why not and would these tests make a difference in the nature, timing, and extent of audit procedures?

  Compare financial ratios with each of preceding three years

Calculate the financial ratios for Chase and then interpret those results against 3 banking industry companies historical data as well as industry

  How the use of ethics by the parties involved

Critique the Ethics of those involved in the News of the World phone hacking scandal. Demonstrate in your critical analysis how the use of Ethics by the parties involved could have assisted in better operation of News Ltd.

  What is the new sales price in nzd

NZD appreciates by 16.22% against the USD. What is the new sales price in NZD after the NZD appreciation? Assume that Kim Inc. is an exporter firm

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd