On January 1, 2014, ABC Incorporated Issued $10,000,000 Face Amount

question 78

Essay

On January 1, 2014, ABC Incorporated issued $10,000,000 face amount of 8%, 10 year, subordinate convertible debentures at face value in a private placement.The debentures pay interest annually, in cash, on 31 December.The bonds were issued for $12 million, and that the market rate was 6%:
Assume that the shares were never converted, and the principal was simply repaid at maturity.Provide the required journal entry.

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Definitions:

Bill of Rights

The first ten amendments to the United States Constitution, guaranteeing essential rights and freedoms to American citizens.

Daniel Shays

An American soldier and leader known for leading Shays' Rebellion (1786-87), a series of protests by American farmers against state and local enforcement of tax collections.

Federalist Papers

A collection of 85 articles and essays written by Alexander Hamilton, James Madison, and John Jay promoting the ratification of the United States Constitution in the late 1780s.

New Jersey Plan

A proposal at the Constitutional Convention favoring a unicameral legislature with equal representation for each state, regardless of population size.