On January 1, 2024, Gless Textiles issued $19 million of 8%, 10-year convertible bonds at...
50.1K
Verified Solution
Link Copied!
Question
Accounting
On January 1, 2024, Gless Textiles issued $19 million of 8%, 10-year convertible bonds at 101.
The bonds pay interest on June 30 and December 31.
Each $1,000 bond is convertible into 40 shares of Glesss no par common stock.
Bonds that are similar in all respects, except that they are nonconvertible, currently are selling at 99 (that is, 99% of face amount).
Century Services purchased 15% of the issue as an investment.
Required:
Prepare the journal entries for the issuance of the bonds by Gless and the purchase of the bond investment by Century.
Prepare the journal entries for the June 30, 2028, interest payment by both Gless and Century assuming both use the straight-line method.
On July 1, 2029, when Glesss common stock had a market price of $33 per share, Century converted the bonds it held. Prepare the journal entries by both Gless and Century for the conversion of the bonds (book value method).
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
