Presented Below Are Three Independent Situations

question 190

Essay

Presented below are three independent situations:
(a) Ball Corporation purchased $380000 of its bonds on June 30 2017 at 102 and immediately retired them. The carrying value of the bonds on the retirement date was $371500. The bonds pay annual interest and the interest payment due on June 30 2017 has been made and recorded.
(b) Horton Inc. purchased $400000 of its bonds at 96 on June 30 2017 and immediately retired them. The carrying value of the bonds on the retirement date was $395000. The bonds pay annual interest and the interest payment due on June 30 2017 has been made and recorded.
(c) Valley Company has $80000 10% 12-year convertible bonds outstanding. These bonds were sold at face value and pay annual interest on December 31 of each year. The bonds are convertible into 40 shares of Valley $4 par value common stock for each $1000 par value bond. On December 31 2017 after the bond interest has been paid $30000 par value of bonds were converted. The market value of Valley's common stock was $38 per share on December 31 2017.
Instructions
For each of the independent situations prepare the journal entry to record the retirement or conversion of the bonds.

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