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Prepare journal entries for the conversion of all bonds

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Pawni Inc. needs Sh 2 Million for additional financing. On December 31, 2012, it borrowed money by issuing Sh 500,000, 11%, 10 year convertible bonds. The bond sold at face value ad pay semi-annual interest on January 1 and July 1. Each Sh. 1,000 bond is convertible into 30 shares of Pawni Inc. Sh 20 par value common stock.

Question 1: Prepare journal entries for;

  1. issuance of the bonds on January 1, 2013
  2. interest expenses on July 1 and December 31, 2013
  3. the payment of interest on January 1, 2004
  4. the conversion of all bonds to common stock on January 1, 2004, when the market value of common stock was Sh 67 per share

Reference no: EM132584415

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