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When Bonds Are Converted to Common Stock,what Is the Basis

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Essay

When bonds are converted to common stock,what is the basis for recording (valuing)the stock issued?


Definitions:

Payment

The act of transferring money or other valuable items in exchange for goods, services, or to fulfill a contractual obligation.

Compounded Semi-annually

Refers to the process where the interest earned on an investment is calculated and added to the principal amount every six months.

GIC

A Guaranteed Investment Certificate, particular to the Canadian market, ensures investors a promised rate of return within a set duration.

Semi-annual Interest

Interest that is calculated and paid twice a year on an investment or loan.

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