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What is the entry for issuance of bonds

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Question: On January 1, 2020, Sierra Corp. issued 500, $1,000, 6% convertible bonds at face value. Each bond is convertible into 15 shares of $1 par value common stock. As an inducement to convert the bonds into common stock in 2022 prompted by a drop in interest rates, the company offered $35,000 to bondholders, payable upon conversion. All of the bondholders converted to common stock in June of 2022.

- What is the entry for issuance of bonds on January 1, 2020.

- What is the entry for Sierra Corp. for conversion of the bonds in June of 2022, using the book value method.

Reference no: EM132738324

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