$6,000,000 4% Bonds issued @104 on 1/1/17. Interest is paid every six months 6/30 &...
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$6,000,000 4% Bonds issued @104 on 1/1/17.
Interest is paid every six months 6/30 & 12/31.
Premium is amortized on a straight-line basis.
After 2 years from the date of issue, the bonds can be converted into Common Stock as follows: For every $1,000 in bonds, the bond holder can convert the bond into 8 shares of common stock.
On 1/1/19 $600,000 of bonds are converted: $600,000/$1,000 = 600 x 8 = 4,800 shares.
On 3/31/19 an additional $600,000 of bonds are converted: $600,000/$1,000 = 600 x 8 = 4,800 shares.
Using the above information, prepare the required journal entries on the following dates:
a. December 31, 2018
b. January 1, 2019
c. March 31, 2019
d. June 30, 2019
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