Acct551 Hw6

E16-1

1.

* Cash | * 9,900,000 |

* Discount on Bonds Payable | * 100,000 |

* Bonds Payable | * 10,000,000 |

* Bonds Issue Cost | * 70,000 |

* Cash | * 70,000 |

2.

* Cash | * 9,800,000 |

* Discount on Bonds Payable | * 600,000 |

* Bonds Payable | * 10,000,000 |

* Paid-in Capital-stock warrants | * 400,000 |

* 3.

Conversion Expense | 75,000 |

Bonds Payable | 10,000,000 |

Discount on Bonds Payable | 55,000 |

Additional Paid-in Capital | 8,945,000 |

Common Stock | 1,000,000 |

Cash | 75,000 |

E16-6

January 1, 2012:

Cash | 3,060,000 |

Premium on Bonds payable | 60,000 |

Bonds Payable | 3,000,000 |

(a) December 31, 2012:

Interest Expense | 117,000 |

Premium on Bonds payable | 3,000 |

Cash | 120,000 |

(b) January 1, 2013:

Bonds Payable | 600,000 |

Premium on Bonds payable | 9,600 |

Common Stock | 480,000 |

Additional Paid in Capital | 129,600 |

Premium=(60,000-12,000)*20%=9,600

(c) March 31, 2013:

Interest Expense | 11,700 |

Premium on Bonds payable | 300 |

Bonds Payable | 12,000 |

Bonds Payable | 600,000 |

Premium on Bonds payable | 9,300 |

Common Stock | 480,000 |

Additional Paid in Capital | 129,300 |

(d) June 30, 2013:

Interest Expense | 70,200 |

Premium on Bonds payable | 1,800 |

Cash | 12,000 |

E16-8

Cash | 3,150,000 | |

Bonds Issue Cost | 30,000 | |

Bonds Payable | | 3,000,000 |

Premium on Bonds Payable | | 102,000 |

Paid-in Capital- Stock...