Provide entries for stonewall corporation

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Recording Entries for Convertible Bonds

Stonewall Corporation issued $56,000 of 5%, 10-year convertible bonds. Each $1,000 bond is convertible to 10 shares of common stock (par $50) of Stonewall Corporation. The bonds were sold at 105 on January 1, 2020.

Required

Problem a. Provide the entry for Stonewall Corporation on January 1, 2020, for the bond issuance.

Problem b. Provide entries for Stonewall Corporation assuming that the conversion privilege is subsequently exercised immediately after the end of the third year. Assume that at the date of conversion, 30% of any premium or discount has been amortized and the common stock was selling at $350 per share. Use the book value method.

Reference no: EM132710879

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