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How much will be debited or credited to the common shares

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Reference no: EM133144053

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Q1. XYZ Inc is going through a reorganization and will be doing an exchange of its bonds after discussions with lenders. It currently has $430,703 of 8.57% first-mortgage bonds outstanding. These bonds will be exchanged for $287,135 of 5.31% first-mortgage bonds and 17,945 new common shares. In the journal entry to record this exchange, how much will be debited or credited to the Common Shares?

a. $143,568

b. $154,336

c. $157,925

d. $150,746

e. $147,157

Q2. P1, P2, and P3 are partners in XYZ Inc. Their capital balances on Dec 31, Year 5, are $275,991 for P1, $184,004 for P2, and $230,002 for P3. Among these partners on this date, the income sharing ratios are 40.93% for P1, 37.42% for P2, and the remainder for P3. On Jan 1, Year 6, P1 will retire from the partnership and will be paid $332,211 as a return of capital. In the journal entry to record the retirement, how much capital will be credited or debited to P2 on Jan 1 using the BONUS method?

a. $32,943

b. $35,615

c. $32,053

d. $33,834

e. $34,724

Reference no: EM133144053

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