Reference no: EM132720351
Assignment: On Jan. 1, 2020, Issuer Corporation issued $8 million of 9%, 10-year convertible bonds priced to yield 10% (current market rate). The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 50 shares of $1 par common stock. Issuer Corp. has opted to use fair value accounting to account for this bond issue. They adjust the books after every interest payment to correct reflect fair market values. On June 30, 2020 the market rate for bonds of like risk was 9.5%, on Dec. 31, 2020 the comparable interest rate was 9.5% and on June 30, 2021 the market rate of interest on similar risk bonds was 9.6%. Issuer Corporation uses the effective-interest method for amortization of bond discount or premium. They use the market value method to account for any bond conversions.
On July 1, 2021, Buyer Company exercised the option to convert all their holdings. The market price per share for Issuer Corporation was $22.00 at the time of the conversion.
On Jan. 1, 2020, Buyer Company purchased 10% of the Issuer Corporation bonds as an investment. On July 1, 2021, Buyer exercised their option and converted all its bonds into common stock of Issuer Corporation. Buyer Company uses the effective-interest method for amortization bond discount or premium. Buyer has NOT opted to use fair value methods
Required: Prepare journal entries for Issuer Corporation for the dates listed below.
A. Jan. 1, 2020
B. June 30, 2020
C. December 31, 2020
D. June 30, 2021
E. July 1, 2021
Required: Prepare journal entries for Buyer Company for the dates listed below.
F. Jan. 1, 2020
G. June 30, 2020
H. December 31, 2020
I. June 30, 2021
J. July 1, 2021
|
What is the total loss on realization
: Total assets amounted to P2,392,500, including P262,500 cash, and liabilities totaled P750,000. The partnership was liquidated on December 31, 2020.
|
|
Should the auditor comply with the requests
: The auditor has always received good cooperation from a particular client and has no reason to question management's integrity.
|
|
Determine the amount of goodwill arising out of acquisition
: The P Ltd acquires all issued capital of the S Ltd for a consideration of $1,000,000 cash and 800,000 shares each valued at $1.50. The summary statement of the.
|
|
Calculate the gain or loss on the sale at the end of year
: Tullahoma Company purchased equipment for $27,500. It depreciated the equipment over a five year life by the double-declining-balance.
|
|
Prepare journal entries for issuer corporation
: On Jan. 1, 2020, Issuer Corporation issued $8 million of 9%, 10-year convertible bonds priced to yield 10% (current market rate). The bonds pay interest on.
|
|
What is the math behind the given equation
: What is the accounts receivable turnover using the following data? Accounts receivable, January 1 - $36,000; accounts receivable.
|
|
Who is the independent auditor for target
: Who is the independent auditor for Target? What type of opinion did the independent auditor issue on Target's financial statements?
|
|
How do we make a statement of cash flow
: How do we make a statement of cash flow using the Direct Method? The response must be typed, double spaced, times new roman.
|
|
What is a benefit of a company not declaring dividends
: The company sells sanitisers and made a high quantity of sales, N$ 421 000, a 75% increase in sales from the prior year. The company manufactures sanitizers.
|