Pryor corporation had two issues of securities outstanding

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Pryor Corporation had two issues of securities outstanding; common stock and an 8% convertible bond issue in the face amount of $16,000,000. Interest payments dates of the bond issue are June 30th and December 31st. The conversion clause in the bond indenture entitles the bondholders to receive forty shares of $20 par value common stock in exchange for each $1000 bond. On June 30, 1998, the holders of $2,400,000 fave value bonds exercised the conversion privilege. The market price of the bonds on that date was $1100 per bond and the market price of the common stock was $35. The total unamortized bond discount at that date of conversion was $1000,000. In applying the book value method, what amount should Pryor Corporation credit to the account "Paid in Capital in Excess of Par," as a result of this conversion?

Reference no: EM13598735

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