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Feliz [49]
2 years ago
5

Splish Corporation has outstanding 2,200 $1,000 bonds, each convertible into 50 shares of $10 par value common stock. The bonds

are converted on December 31, 2020, when the unamortized discount is $21,200 and the market price of the stock is $21 per share.
Record the conversion using the book value approach.
Business
1 answer:
Nimfa-mama [501]2 years ago
6 0

Answer:

The book value method is a technique for recording the conversion of a bond into stock. In essence, the book value at which the bonds were recorded on the books of the issuer is shifted to the applicable stock account. Here, the journal entry for Splish Corporation of the conversion of the bonds would be,

Account Title                                                              Debit        Credit

Bonds Payable (2,200 bonds x $1000).................2,200,000

Discount on Bonds Payable...............................................................21,200

Common Stock (50 shares x $10 x 2200 bonds).......................1,100,000

Paid in Cash in excess of Par

- Common Stock.................................................................................1,078,800

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Suppose that there is currently a $2 per bottle of tax on vodka that is levied on consumers. Legislators have decided to give co
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Hutter Corporation declared a $0.50 per share cash dividend on its common shares. The company has 27,000 shares authorized, 13,2
Ilia_Sergeevich [38]

Dr Retained Earnings  $5400

Cr Common Dividends Payable $5400

is the journal entry.

<h3>What is outstanding share?</h3>

Share outstanding concerns to the company's current stock, which is occurred by the all of its shareholder. including fund managers' share blocks and restrictive investments made by the company's officials and personnel.

On a any company's balance sheet, Capital Stock is the main heading in which outstanding shares are listed.

Thus, the journal entry has passed above.

For more details about outstanding share, click here:

brainly.com/question/18568835

#SPJ1

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