| Posted: 16 Apr 2009 at 10:03 | IP Logged
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Surely, Jams :)
Face Value of the bonds converted = $1,800,000
Par Value of the common stock = $20
"The conversion clause in the bond indenture entitles the bondholders to receive forty shares of $20 par value common stock in exchange for each $1,000 bond"
Thus, Common Stock issued =
= 1,800,000 X 40 shares X $20 par value per share
$1000
= $1,440,000
Remember, we are following the book value method. Any excess of "face value of bonds less unamortized discount" over "common stock issued" goes to "APIC".
__________________
Divya - CO State
Passed using Becker Review :
FAR - 04/11/09 - 94
BEC - 05/30/09 - 86
REG - 08/29/09 - 95
AUD - 11/21/09 - 92
Ethics - 2011
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Topic: At time of conversion
Topic Closed)
