On December 31,2009,the balance sheet of L and H Corporation reported bonds outstanding with a face value of $1,000,000 and a related unamortized premium of $50,000.Interest is payable semiannually on January 1 and July 1.
a. Prepare an entry in journal form without explanations to record the retirement of bonds with a face value of $600,000 on January 1, 2010, assuming the bonds were redeemed at a call price of 103.
b. Prepare an entry in journal form without explanation on January 1, 2010, to record the conversion of bonds with a face value of $400,000 into common stock. Each $1,000 bond is convertible into 25 shares of $10 par value common stock.

Question

Quizplus · Accepted Answer

The Answer of On December 31,2009,the balance sheet of L and H Corporation reported bonds outstanding with a face value of $1,000,000 and a related unamortized premium of $50,000.Interest is payable semiannually on January 1 and July 1.
a. Prepare an entry in journal form without explanations to record the retirement of bonds with a face value of $600,000 on January 1, 2010, assuming the bonds were redeemed at a call price of 103.
b. Prepare an entry in journal form without explanation on January 1, 2010, to record the conversion of bonds with a face value of $400,000 into common stock. Each $1,000 bond is convertible into 25 shares of $10 par value common stock.

On December 31,2009,the Balance Sheet of L and H Corporation