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ACC - Garr Co. issued $4,220,000 of 12%, 5-year convertible bonds

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Garr Co. issued $4,220,000 of 12%, 5-year convertible bonds on December 1, 2014 for $4,237,830 plus accrued interest. The bonds were dated April 1, 2014 with interest payable April 1 and October 1. Bond premium is amortized each interest period on a straight-line basis. Garr Co. has a fiscal year end of September 30.;On October 1, 2015, $2,110,000 of these bonds were converted into 29,000 shares of $15 par common stock. Accrued interest was paid in cash at the time of conversion.;Prepare the entry to record the interest expense at April 1, 2015. Assume that interest payable was credited when the bonds were issued.;Prepare the entry to record the conversion on October 1, 2015. Assume that the entry to record amortization of the bond premium and interest payment has been made.

 

Paper#79985 | Written in 18-Jul-2015

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