1 and July 1. The discount in connection with the issue was $120,000, which is being amortized monthly on a straight-line basis.The bonds are convertible after one year into 15 shares of Volker Inc.'s $1 par value common stock for each $1,000 of bonds.On October 1, 2021, $600,000 of bonds were turned in for conversion into common stock. Interest has been accrued monthly and paid as due. At the time of conversion, any accrued interest on bo

1 and July 1. The discount in connection with the issue was $120,000, which is being amortized monthly on a straight-line basis.The bonds are convertible after one year into 15 shares of Volker Inc.'s $1 par value common stock for each $1,000 of bonds.On October 1, 2021, $600,000 of bonds were turned in for conversion into common stock. Interest has been accrued monthly and paid as due. At the time of conversion, any accrued interest on bo

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 4EB: Chung Inc. issued $50,000 of 3-year bonds on January 1, 2018, with a stated rate of 4% and a market...

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Instructions

Prepare the journal entries to record the conversion, amortization, and interest in connection with the bonds as of the following dates. (Round to the nearest dollar.)

a. October 1, 2021. (Assume the book value method is used.)

b. October 31, 2021.

c. December 31, 2021, including closing entries for end-of-year.

Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.

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