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Ex. 16-120???Convertible Bonds.




Ex. 16-120???Convertible Bonds.;Dahl Co. issued $5,000,000 of 12%, 5-year convertible bonds on December 1, 2006 for $5,020,800 plus accrued interest. The bonds were dated April 1, 2006 with interest payable April 1 and October 1. Bond premium is amortized each interest period on a straight-line basis. Dahl Co. has a fiscal year end of September 30.;On October 1, 2007, $2,500,000 of these bonds were converted into 35,000 shares of $15 par common stock. Accrued interest was paid in cash at the time of conversion.;Instructions;(a) Prepare the entry to record the interest expense at April 1, 2007. Assume that interest payable was credited when the bonds were issued (round to nearest dollar).;(b) Prepare the entry to record the conversion on October 1, 2007. Assume that the entry to record amortization of the bond premium and interest payment has been made


Paper#24998 | Written in 18-Jul-2015

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