Prepare the entry to record the issuance of the convertible

Assignment Help Accounting Basics

Reference no: EM13653221

Daisy Inc. issued $6.6 million of 10-year, 9%, convertible bonds on June 1, 2014, at 96 plus accrued interest. The bonds were dated April 1, 2014, with interest payable April 1 and October 1. Bond discount is amortized semi-annually. Bonds without conversion privileges would have sold at 95 plus accrued interest.

On April 1, 2015, $1.65 million of these bonds were converted into 34,375 common shares. Accrued interest was paid in cash at the time of conversion but only to the bondholders whose bonds were being converted. Assume that the company follows IFRS.

Instructions
(a) Prepare the entry to record the issuance of the convertible bonds on June 1, 2014.
(b) Prepare the entry to record the interest expense at October 1, 2014. Assume that accrued interest payable was credited when the bonds were issued. (Round to nearest dollar.)
(c) Prepare the entry(ies) to record the conversion on April 1, 2015. (The book value method is used.) Assume that the entry to record amortization of the bond discount using the straight-line method and interest payment has been made.
(d) What do you believe was the likely market value of the common shares as of the date of the conversion of April 1, 2015?

Reference no: EM13653221

Questions Cloud

What is the spring constant of the spring : A 0.20-kg metal sphere oscillates at the end of a vertical spring.As the spring stretches from 0.13 to 0.21 m (relative to itsunstrained length), the speed of the sphere decreases from 5.3 to4.6 m/s. What is the spring constant of the spring?

What is the final speed of both vehicles after the collision : A 601 kg car stopped at an intersection is rear-ended by a 1420 kg truck moving with a speed of 11.5 m/s. what is the final speed of both vehicles after the collision

Long string and a small ball attached to its free end : A simple pendulum is made from a 0.63 mlong string and a small ball attached to its free end. The ball is pulled to one side through a small angle and then released from rest. After the ball is released, how much time elapses before itattains its ..

Explain compound c is treated with nabh4 : Aldose A undergoess Ruff degredation to give Compound C. When Compound C is treated with NaBH4, optically inactive alditol D is formed.

Prepare the entry to record the issuance of the convertible : Prepare the entry to record the issuance of the convertible bonds on June 1, 2014.

Calculate the direction and magnitude of the owners velocit : A 20.0 kg dog is running northward at 2.00 m/s, while a 5.00 kg cat is running eastward at 2.64 m/s. calculate the direction and magnitude of the owner's velocity

What is the elastic modulus of this wire : A wire has a diameter of 0.200mm and stretches 20% when a force of 6.28 Newtons is applied to it. What is the elastic (Young's) modulus of this wire

Explain the concentration of ethanol in microgram ethanol : What is the concentration of Ethanol (CH3CO2H) in (PPM)m that is 1 microgram ethanol per liter of water

Visit this web site and review some of the announcements : Visit this Web site and review some of the announcements.

User Account

All Pages