LMN Company Reported the Following Amounts on Its Balance Sheet

question 55

Essay

LMN Company reported the following amounts on its balance sheet at July 31,2013:
Liabilities
Equity
Additional information
1. The bonds pay interest each July 31. Each $1,000 bond is convertible into 5 common shares. The bonds were originally issued to yield 10%. On July 31,2014,all the bonds were converted after the final interest payment was made. LMN uses the book value method to record bond conversions as recommended under IFRS.
2. No other share or bond transactions occurred during the year.
Requirement:
a. Prepare the journal entry to record the bond interest payment on July 31,2014.
b. Calculate the total number of common shares outstanding after the bonds' conversion on July 31,2014.
c. Prepare the journal entry to record the bond conversion.

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Definitions:

Numbered Features

This term does not correspond to a specific scientific concept and thus is considered not a valid key term.

Coral Reefs

Underwater ecosystems characterized by reef-building corals, which are colonies of tiny living animals found in marine waters that contain few nutrients.

Promote Growth

Activities or substances that encourage or stimulate development or enlargement.

Continental Slope

The continental slope is the steep incline between the outer edge of the continental shelf and the deep ocean floor.