Hey Folks,

Can anyone take a look at sim#2 in wiley text book and explain me the JE with calculations of Conv.Bonds on Oct.1-2008

I get half the entry but unable to understand where do they get 42150..As they have mentioned the c.V of bonds is 104300 so they just took half of that???

I cannot type int he whole thing here..

Plzzzz anyone....

Meghna

The APIC is a plug amount to balance the JE. Basically once you retire the bonds and the unamortized premium, then credit the common stock at par  the APIC becomes a plug. Since the book value method was used there cannot be a gain or loss on the conversion.