User Account

All Pages

Make the journal entry to record the conversion

Assignment Help Financial Accounting
Reference no: EM132538606

On July 1, 2018, Vaughn Ltd., which follows ASPE, issued a series of $4,600,000 face-value convertible bonds due in five years. Each $1,000 bond allowed the holder to convert the bond to 100 common shares. On the day the bonds were issued, Vaughn calculated that the conversion rights were valued at $221,090.

On July 1, 2021, the bonds had a carrying value on Vaughn's books of $4,516,087, and the fair market value of the bonds without the convertible option was $4,530,000.

Question 1. Assume all the bondholders voluntarily decided to convert their bonds to common shares on July 1, 2021. Prepare the journal entry to record the conversion.

Question 2. Assume that Vaughn paid the bondholders an incentive of $36,500 to convert their bonds to common shares, and that all the bondholders agreed to convert their bonds to common shares on July 1, 2021. Prepare the journal entry to record the conversion.

Explain with calculation.

Reference no: EM132538606

Questions Cloud

What tax t should it set to achieve the social optimum : To correct the externality, the government decides to impose a tax of T per unit sold. What tax T should it set to achieve the social optimum?
Purpose of determining the number of days : A $5300 loan at 6.6% compounded monthly was settled by a single payment of $6500 including accrued interest. Rounded to the nearest day, how long after
Development at the end of the last year of operations : A proposed development would require the investment of $3 million at the beginning of the first year and a further investment of $3 million
What is the maximum mortgage loan : What is the maximum mortgage loan they can afford if the amortization period is: a) 15 years b) 20 years c) 25 years d) 30 years?
Make the journal entry to record the conversion : Assume all the bondholders voluntarily decided to convert their bonds to common shares on July 1, 2021. Prepare the journal entry to record the conversion.
Why are equity holders more likely than debt holders : Why are equity holders more likely than debt holders to want firms to engage in risky investments?
Organizational innovation analysis : What are your organization's competitors' current trends of innovation? How does your organization's innovativeness compare to its competitors'?
Calculate the npv of poseidon shipping : Calculate the NPV of Poseidon Shipping. Round your answer to the nearest $1000.Percy has been asked by his manager to perform an analysis
Discuss how intellectual capital is reported : Discuss how intellectual capital is reported under integrated reporting in comparison to other corporate reporting frameworks

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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