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Feliz [49]
3 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]3 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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5 0
3 years ago
You own a portfolio that has a total value of $215,000 and it is invested in Stock D with a beta of .86 and Stock E with a beta
babunello [35]

Answer:  BP = BD(WD) + BE(WE)

                   1 = 0.86(1-WE) + 1.39WE

                   1 = 0.86-0.86WE + 1.39WE

                   1 = 0.86 + 0.53WE

                 -0.53WE = -0.14

                  0.53WE  = 0.14

                         WE   = 0.14/0.53

                         WE   = 0.2641509434

                         WD = 1 - WE

                         WD = 1 - 0.2641509434

                         WD = 0.7358490566

The dollar amount of investment in stock D = 0.7358490566 x $215,000

                                                                         = $158,207.54

Explanation: The beta of the portfolio is 1, which corresponds to the beta of the market. The beta of the portfolio equals beta of each stock multiplied by the percentage of fund invested in each stock(weight). The weight of stock D is equal to 1 - weight of stock E. Therefore, we need to make weight of stock E the subject of the formula by solving the problem mathematically and collecting the like terms. The weight of stock E is 0.2641509434. The weight of stock E will be subtracted from 1 so as to obtain the weight of stock D, which is 0.7358490566. The dollar amount of stock D equal to $215,000 multiplied by 0.7358490566, which is $158,207.54.

4 0
3 years ago
The following information relates to the manufacturing operations of the IMH Publishing Corporation for the year:Beginning Endin
LenKa [72]

Answer:

Raw materials purchased = $111,000

Explanation:

given data

                                           Beginning                       Ending

Raw materials inventory     $47,000                        $50,000

Finished goods                     58,000                          50,000

raw materials use manufacturing = $108,000

solution

we get here Raw materials purchased that is express as

Raw materials purchased + beginning raw material = ending Raw materials + Raw materials used    ...................1

put here value and we get

Raw materials purchased = $50,000 + $108,000 - $47,000

Raw materials purchased = $111,000

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Answer:

See below

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Rashid [163]

Answer:

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3 0
3 years ago
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