Reference no: EM132463446
The question:
Question 1: On January 1, 2020, when the fair value of its common shares was $80 per share, Hammond Corp. issued $10 million of 8% convertible debentures due in 20 years. The conversion option allowed the holder of each $1,000 bond to convert the bond into five common shares. The debentures were issued for $10.8 million. The bond payment's present value at the time of issuance was $8.5 million and the corporation believes the difference between the present value and the amount paid is attributable to the conversion feature. On January 1, 2021, the corporation's common shares were split 2 for 1, and the conversion rate for the bonds was adjusted accordingly. On January 1, 2022, when the fair value of the corporation's common shares was $135 per share, holders of 30% of the convertible debentures exercised their conversion option. Hammond Corp. applies ASPE, and uses the straight-line method for amortizing any bond discounts or premiums.
Problem 1: Assume, instead, that Hammond Corp. decides to retire the bonds early, on January 1, 2022, by paying cash of $3,306,000 to the bondholders. On that date, the fair value of a similar bond without the conversion feature is $870 per bond. Prepare the journal entry using the book value method.
|
Marketing communications plan
: What factors do you think would be involved in developing and managing an effective marketing communications plan for a new product or service?
|
|
Distinguish project management methodologies and tools
: Distinguish project management methodologies and tools.
|
|
Should be reported on the discontinued operation section
: Continue with Ralph C., the total income or loss that should be reported on the discontinued operation section in the fiscal year of 2016
|
|
Compute depreciation expense using the double-declining
: Compute 2017 depreciation expense using the double-declining-balance method, assuming the machinery was purchased on October 1, 2017.
|
|
Prepare the journal entry using the book value method
: Assume, instead, that Hammond Corp. decides to retire the bonds early, on January 1, 2022, by paying cash of $3,306,000 to the bondholders.
|
|
Prepare journal entries for march month
: Prepare journal entries for march month,March 1 sold merchandise on account to Dodson company for $8,800, terms 6/10, n/30
|
|
Determine the amounts before the stock dividend was declared
: Determine the amounts before the stock dividend was declared: total paid-in capital, total retained earnings, and total stockholders' equity
|
|
Write a Business Report on the performance of Starbucks
: You are required to write a Business Report for the CEO on the performance of Starbucks using independent research and the case study
|
|
Determine what is premium amortization
: Journalize the first interest payment and the amortization of the related bond premium. Round to the nearest dollar. If an amount box does not require an entry
|