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sergeinik [125]
3 years ago
13

"A corporation has issued $1,000 par, 8% convertible bonds, callable at par. The bonds are convertible into 20 shares of common

stock. Currently, the bond is trading at 100 1/2 while the common stock is trading at $51. The corporation calls the bonds at par plus accrued interest of $10 per bond. A customer holds 100 bonds, purchased at par. The customer wishes to liquidate the position at the greatest profit. The BEST recommendation is to (ignoring commissions):"
Business
1 answer:
enot [183]3 years ago
3 0

Answer:

Convert the bonds into 20 common stocks.

Explanation:

the investor has 3 options:

  1. sell the bond at $1,000 x 1.005 = $1,005
  2. sell the bond to the corporation at $1,000 + $10 = $1,010
  3. convert the bond into 20 common stocks = 20 x $51 = $1,020

the option that yields the highest return is to convert the bonds into common stocks.

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7. Choose if the product is a Good, a Service, or Both.
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Elena works in the audit department of a practice as an audit administrator. She assists the audit teams by recording and proces
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4 0
3 years ago
On January ​3, Halsall Corporation purchased 1,800 shares of the​ company's ​$1 par value common stock as treasury​ stock, payin
Salsk061 [2.6K]

Answer:

The journal entries alongwith its explanation are as under:

Explanation:

Journal entry at Jan 3, to record purchase of treasury stock would include the recording of treasury stock at the price paid to the shareholders for purchase of the stock, the journal entry is as under:

Dr Treasury Stock (1800 share*$8 per share) $14,400

Cr Cash                                                                      $14,400  

 

Journal entry at Jan 30, of selling treasury stock would include the elimination of the treasury stock at the amount purchased and the remainder will will be the Paid-In Capital, the journal entry is as under:

Dr Cash (1200*9)                 $10,800

Cr Treasury stock (1200*8) $9,600

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4 0
3 years ago
The following incorrect income statement was prepared by the accountant of the Axel Corporation:
Airida [17]

Answer:

Sales revenue         $  710,000

Cost of goods sold $ 385,000

Gross Profit             $ 325,000

Selling expense              71,000

Administrative expense 91,000

Operating Income        163,000

Non-Operating Income

Interest revenue                   44,000

Gain on sale of investments 91,000

Interest expense                  (28,000)

Restructuring costs              (67,000)

Income before taxes           203,000

Income tax expense              (50,750)

Net Income                            152,250

Shares outstanding 100,000

Earnings per share $1.52

Explanation:

We need to determinate gross profit.

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3 0
3 years ago
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