If Sixty $1,000 Convertible Bonds with a Carrying Value of $70,000

question 179

Short Answer

If sixty $1,000 convertible bonds with a carrying value of $70,000 are converted into 9,000 shares of $5 par value common stock, the journal entry to record the conversion is

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Definitions:

Allowance for Doubtful Accounts

An accounting provision made to account for customers' invoices that may not be collectible in the future.

Partial Balance Sheet

An abbreviated balance sheet that shows a snapshot of a company’s financial position at a specific point in time, focusing on specific items.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within a year.

Notes Receivable

Financial assets representing amounts owed to the company by others, where the terms of repayment are defined in formal documents called notes.