On December 31, 2009, the Balance Sheet of the Gable

question 71

Essay

On December 31, 2009, the balance sheet of the Gable Corporation reported 1,000 bonds outstanding with a face value of $500,000 and a related unamortized discount of $35,000. The bonds are convertible at the rate of 25 shares of common stock for each $1,000 bond. On January 1, 2010 , the bondholders presented $400,000 of the bonds for conversion. The entry to record this conversion contained a credit to Additional Paid-in Capital for $172,000. Calculate the par value per share of the common stock.

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Definitions:

Borrowed

Refers to funds or resources obtained temporarily from another party, usually with the promise of repayment plus interest.

Final Payment

The last installment paid in a series of payments, concluding the payment obligation under a financial agreement.

Interest Annually

A method where interest is calculated once every year and added to the principal sum, affecting the total amount of interest earned or paid over the life of the loan or investment.

Annual Rate

The interest rate over a year's time, often used in financial contexts to describe the yield of an investment or the cost of a loan.