Fogel Co. has $5,000,000 of 8% convertible bonds outstanding. Each $1,000 bond is convertible into 30 shares of $30 par value common stock. The bonds pay interest on January 31 and July 31. On July 31, 2012, the holders of $1,600,000 bonds exercised the conversion privilege. On that date the market price of the bonds was 105 and the market price of the common stock was $36. The total unamortized bond premium at the date of conversion was $350,000. Fogel should record, as a result of this conversion, a _____.;Selected Answer;[None Given];Response Feedback;$1,600,000 + ($350,000 ?.32) ? (1,600 ? 30 ? $30) = $272,000;i have arrived at the answer but need an explanation of where the.32 comes from.
Paper#24100 | Written in 18-Jul-2015Price : $27