Business, 16.09.2021 14:10 leslie1811

For each of the unrelated transactions described below, present the entry(ies) required to record the bond transactions. 1. On August 1, 2015, Lane Corporation called its 10% convertible bonds for conversion. The $7,000,000 par bonds were converted into 280,000 shares of $24 par common stock. On August 1, there was $700,000 of unamortized premium applicable to the bonds. The fair value of the common stock was $20 per share. Ignore all interest payments.
2. Packard, Inc. decides to issue convertible bonds instead of common stock. The company issues 10% convertible bonds, par $3,000,000, at 96. The investment banker indicates that if the bonds had not been convertible they would have sold at 94.
3. Gomez Company issues $8,000,000 of bonds with a coupon rate of 8%. To help the sale, detachable stock warrants are issued at the rate of ten warrants for each $1,000 bond sold. It is estimated that the value of the bonds without the warrants is $7,896,000 and the value of the warrants is $504,000. The bonds with the warrants sold at 101.

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